israir 298.88 courtesy.
(photo credit: Courtesy photo)
The long standing battle between El Al and Israir over opening the New York route to local competition came to an end Thursday as the High Court of Justice rejected an El Al petition to cancel Israir's recent upgrade to scheduled carrier on the route.
"The court decision is a victory for the consumer and the Israeli economy," Israir said in response to the ruling. "There is no doubt that the increased competition will benefit many people including the consumer, the tourism and aviation industries and the general business sector."
The court said it would provide its explanation on the ruling separately.
El Al, parent company Knafaim Holdings Ltd. and the El Al workers union each had presented the court with petitions against the Tourism Ministry after Minister Avraham Hirchson granted Israir designated carrier status to New York. They claimed the government decision was a violation of a commitment made to it by the government on the eve of its privatization that an extra carrier would not be added to scheduled routes until total air passenger traffic to Israel rises to 10.7 million annually. Last year saw 8.5 million passengers pass through Ben- Gurion Airport.
El Al acknowledged the decision but would not comment further on it.
Hirchson welcomed the court ruling saying it would contribute to opening the Israeli economy.
Shares in El Al fell 2.6% to NIS 3.52 on news of the decision.
Business and tourism officials, meanwhile, praised the decision seeing it as a signal for further liberalization in Israel's aviation policy.
"We hope the government will continue to take more steps to encourage competition in the Israeli skies, in order to bring more tourists here," said Avi Ella, President of the Israel Hotels Association.
Chamber of Commerce President Uriel Lynn added that he hoped the decision would lead to a bilateral aviation agreement with the European Union that would result in more airlines flying to Europe from Tel Aviv.
For Israir, the decision clears the way to continue its preparation for the launch of daily flights, expected in June.
Sabina Biran, CEO of Israir said in a recent interview with The Jerusalem Post that while the company had continued to prepare for the launch, the court case had hindered its preparation.
Following Thursday's decision, the company said it would soon complete its preparations for the direct flights.
Israir currently flies three to four flights per week to New York on a charter basis, and works with approximately 450 travel agents who sell its flights. Among the advantages of operating as a scheduled carrier is automatic entry to travel agents' distribution systems.
In response to its change in status, Biran said Israir was looking to lease two extra wide-body aircraft before the launch and plans to buy two new aircraft for the route in the longer-term. The company is also in the process of hiring 200 workers.