Elal plane 311.
(photo credit: Courtesy)
After more than three years of negotiations, Israel and the European Union
signed what was termed a historic “Open Skies” aviation agreement on
The agreement, which promises to increase competition among
airlines, sharply reduce air fares and boost European tourism to Israel, is a
welcome development. But it must be implemented with caution, to minimize the
harmful effects it could have on the local airline industry.
The deal was
inked by the head of Israel’s Civil Aviation Authority, Giora Rom, and the
European Commission’s senior policy officer, Klaus Geil. It still needs the
approval of Israeli and EU institutions, including the cabinet, the Knesset and
the European Parliament.
Gradual implementation is due to begin on April
1, 2013, and take some five years to complete. This is aimed at allowing Israeli
airlines, particularly El Al, to prepare for serious competition.
Minister Stas Meseznikov praised the agreement, calling it “an essential move
that will catapult tourism to Israel by hundreds of thousands of tourists and
bring about a decrease in fares for the Israeli consumer as well.”
also warned that “the state must find a way to ensure support for Israeli
airlines within the new agreement.”
Transportation Minister Israel Katz
said he was convinced that the agreement would result in lower air fares and
ultimately benefit local airline companies.
“I believe in Israeli airline
managers’ abilities to lead their companies to great success even in an
open-market situation, which is beneficial for the market as a whole,” Katz
said. “I predict a significant drop in prices and I believe that this deal will
increase incoming tourism to Israel, create thousands of new jobs for Israelis
and open new destinations.”
Israel and the EU have been discussing the
deal since the end of 2008. A memorandum of understanding was signed in March,
but Katz delayed the final agreement after objections were raised that it could
hurt the local airline industry.
El Al, for example, argued that the
agreement threatened to put it and other local carriers out of
“The company, together with other Israeli airline companies,
expressed its position to the Civil Aviation Authority and the transportation
minister that before signing the Open Skies agreement, a certain number of
conditions must be met, which have not yet been and are vital, according to the
company, to enable Israeli airlines to compete on a fair and equal basis,” El Al
said in a statement.
The Knesset Economics Committee proposed that the
government conduct an economic study to determine the effects of the agreement
on Israeli airlines, but this was apparently not done.
however, welcomed the move. Easy- Jet, for example, issued a statement in Hebrew
saying it was now planning to expand flights between Israel and various
destinations in Europe.
“At this stage, we call on Israel and the EU to
implement the Open Skies agreement so that we can increase flights and the
number of visitors to Israel,” it said.
The pact will replace bilateral
agreements between Israel and each EU nation that specify exactly which airlines
may fly to every destination in Europe and limit the frequency of
Under the deal, seven new weekly flight options will be
introduced to each European destination annually, while several European
airports with heavy traffic will add only three options a year.
end of the five-year period, there is to be full competition on all air routes
between Israel and the EU, with every airline permitted to fly to any
destination as many times as it wants.
Sources in the airline industry
said the EU had exerted diplomatic pressure on Israel to sign the agreement as
soon as possible. The EU is Israel’s most popular and important destination for
flights, with almost 60 percent of all Israeli international passenger flights
going to 16 EU member states.
Tuesday would have been the 100th birthday
of Milton Friedman, the American Jewish economist who became the supreme
advocate of a free-market economy and who died in 2006.
We hope that the
new Open Skies agreement, in keeping with Friedman’s philosophy, paves the way
for more flights, more tourists and lower fares, while at the same time meeting
the conditions set by El Al and other Israeli airlines to avoid harming local
airline companies at the expense of their European counterparts.