El Al monopoly on select routes

Of the four routes, El Al flies to Johannesburg and Bangkok through an agreement with airlines from those countries.

October 31, 2005 09:45
3 minute read.
el al logo on plane tail 88

el al logo 88. (photo credit: )


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El Al Israel Airlines said on Sunday that it has received notification from the Antitrust Authority declaring it a monopoly on its routes to Johannesburg, Hong Kong, Bangkok and Bombay. The ruling came as a result of El Al having more than 50 percent market share on those routes, the authority said, and follows the airline's appeal to the Supreme Court in June to force the government to apply the same reasoning to foreign airlines operating to Tel Aviv. A spokesman for El Al said that it expects a decision from the court in February 2006. "We feel that this decision is a grossly unequal enforcement of the law in the aviation industry," the El Al said in a statement. "The antitrust authority checked El Al alone in applying its ruling, without using the same criterion on the foreign airlines to declare them a monopoly." Antitrust Commissioner Dror Strum told The Jerusalem Post that the decision could not be applied to foreign companies over whom the authority does not have jurisdiction He said that the authority based its ruling on an international precedent which defines any two cities, between which there is international air travel, as a separate market. If a company holds more than 50% share on that market it should be declared a monopoly. Strum added that the ruling was designed to ensure that El Al does not abuse its position in the market and enables the government to exercise price controls on tickets to those destinations. In response, one industry professional said that such government intervention represents a step backwards following the successful privatization of El Al in December last year. He added that the ruling only takes into account direct flights to those destinations but ignores the option passengers have to travel en-route using a foreign airline. Of the four routes in question, El Al operates to Johannesburg and Bangkok in a code-share agreement with the respective airlines operating out of those countries. In June, El Al named 18 airlines that would be affected by an equal application of the ruling, including Continental Airlines flying New York to Tel Aviv and Lufthansa on its Frankfurt route. It stressed in the legal proceeding that it was not looking to prevent the authority from declaring it a monopoly, but rather to prevent a situation from arising in which there would be a lack of equality in the aviation industry.

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