Open skies policy allows local carriers to compete with El Al

Cabinet approves funding of 80% of airlines' security costs.

El Al 224.88 (photo credit: Ariel Jerozolimski [file])
El Al 224.88
(photo credit: Ariel Jerozolimski [file])
El Al's local competition announced plans to start regular routes to Europe over the next few months, following the government's approval of funding of 80 percent of Israeli airlines' annual security costs. Until now, the government financed 50% of the security expenses. The carriers' plans come in anticipation of a new Open Skies era in Israeli aviation. In return for the security funding, El Al Israel Airlines will share routes with smaller Israeli carriers Arkia and Israir. "This reform will dramatically change the Israeli aviation industry," said Transportation Minister Shaul Mofaz. "More carriers will enter this market, plane tickets will be cheaper both for Israeli residents and tourists and the exposure of Israel as a tourist destination will be greater." Mofaz briefed the cabinet on the unique security constrains Israeli carriers faced and said the heavy costs hurt their ability to compete with foreign airlines. The move fits in well with Israel's desire to sign an Open Skies agreement as part of a global aviation agreement with the EU that would replace existing bilateral agreements. Aviations talks between the European Union and the government are expected to take place on February 5. "The European Union has already expressed its support of the move," Transportation Ministry director-general Gideon Siterman said on Sunday. El Al praised the cabinet decision and said it would enable local airlines to cope with increased demand and foreign competition. "In practice, El Al has operated within a competitive market since it was privatized and especially during the past two years, during which the Israeli government has worked to implement an Open Skies policy. As a result, the foreign companies' seat capacity grew by 45%," El Al said in a statement. "El Al expects the Israeli government to assist local carriers in expanding the number of direct route destinations, receiving landing authorizations for more destinations and in supporting local airline companies in their competition with foreign carriers." Avi Nakash, one of the owners of Arkia, said the airline was getting ready to launch more scheduled routes, which would be marketed to customers starting in the summer. "In addition, Arkia is in negotiations to enlarge its plane fleet," including the acquisition of four Boeing 787s, which will be delivered in 2011, said Nakash. Israir's chairman, Guy Rozen, welcomed the government's decision and said his company would start marketing tickets for scheduled flights to European destinations such as London, Moscow, Berlin, Munich, Nice and Verona within a few months. "I don't think this competition should be described as a war. It will be a competition just as in any of the Israeli industries. The competition already exists; the difference is that now it will be equal, right and fair, and the customer will benefit from it," Rozen said.