Global crisis wrecks Continental's plans to add a third flight to Israel

Airline marks 10th anniversary of New York-Tel Aviv route.

By SHARON WROBEL
continental 248.88 (photo credit: Bloomberg)
continental 248.88
(photo credit: Bloomberg)
Continental Airlines, the world's fifth largest airline, says it remains committed to the Israeli market, but its long-awaited prospect of operating a third daily flight to Israel has been scrapped. "The global financial crisis and the aftermath of the recession have let to a drop in demand for both business and leisure air travel which would not warrant the operation of a third flight," said Dave Hilfman, senior vice president of worldwide sales of Continental Airlines, in an interview with The Jerusalem Post in Tel Aviv to mark the 10th anniversary of the Tel Aviv-New York route last month. "The level of demand and the availability of aircraft will determine an addition of a third flight," said Hilfman. "At this point we can't do it at least not until the delivery of the Boeing 787 Dreamliner expected for 2011. It would be the perfect airplane to add on the Israel route most likely to be operated from Houston." In recent months, all American airlines have either entered the Israeli market or expanded their existing presence. In July, US Airways became the third US carrier to fly nonstop to Israel. Continental flies two flights a day from Newark Liberty, while Delta operates daily flights from both JFK in New York and Atlanta. In mid-July Continental Airlines celebrated its 75th anniversary along with the 10th anniversary of its New York-Tel Aviv route. The latter event was by way of a gala dinner for members of the aviation and travel industries at the residence of US Ambassador James Cunningham and his wife, Leslie. Also listed on the invitation was Continental Airlines chairman and CEO Larry Kellner, who didn't show up - and not long after, his resignation was announced. "We are very proud to celebrate the 10th anniversary of the New York-Tel Aviv route on August 2, which has proven to be one of our most solid performing routes even during extraordinary tough political and economic environments," said Hilfman. "Over the past decade, the route has carried 2.5 million passengers on 11,000 flights without stopping operations." Beginning this fall, Continental is joining United Airlines in the Star Alliance, a group of premium European and US airlines that cooperate in marketing their routes to passengers around the world and allows code-sharing. "In addition to sharing revenue benefit, the entry into the Star Alliance agreement includes a joint venture with three core Star carriers German Lufthansa Airlines, United and Air Canada to jointly to arrange capacity, sales and marketing, to set fares and to share revenues in international markets," said Hilfman. "For the Israeli market we will be able to offer very coordinated schedules, frequent flyer reciprocity and very competitive fares in the market." Continental operates up to 312 flights weekly across the Atlantic from 29 airports in 16 countries to its US gateway hubs at New York, Houston and Cleveland, with onward connections to cities throughout the USA., Canada, Mexico, Central and South America, the Caribbean and Asia-Pacific. In March last year, Continental started operating four flights per day from London's Heathrow Airport - twice-daily, non-stop to its New York hub, Newark Liberty International Airport, and twice-daily non-stop to Houston. In October 2008, Continental launched a third daily London Heathrow-New York Liberty service. Global airlines such as Continental have been hit hard by the global financial crisis. The economy has been keeping a lid on business travel this year, which is down between 35 to 40 percent as businesses cut their travel budgets. Since there is a lot of uncertainty about when the economy will turn around and by how much airlines are using a range of strategies to lure business travelers. "Leisure traffic held up relatively well as low prices held up demand," said Hilfman. "In the corporate market place there are discounts across all networks. All airlines have been faced with downturn in corporate traffic." Hilfman explained that corporate travel is very much dependent on the situation of the economy. "We are probably at the bottom of the business cycle. Stabilization of corporate traffic will depend on how quickly the economy will rebound," said Hilfman. "In the US economy we expect some improvement this year going into 2010 and Europe will follow. Israel has also been negatively affected by the global crisis but not as badly and we are seeing traffic demand to the US." In an effort to win business travelers, Continental started to offer from October last year complimentary US helicopter flights between New York's Newark Liberty Airport and Manhattan to business customers traveling between New York and Israel, Europe, Asia, India, Brazil and Argentina. A partnership between Continental and US Helicopter Corporation provides the helicopter service between New York Liberty's Terminal C and two Manhattan locations - the Downtown Manhattan Heliport at Wall Street and the East 34th Street Heliport in Midtown - in each case with a journey time of eight minutes. In a special promotion, Continental Airlines is now enabling passengers travelling in economy class a glimpse of the feeling of living the good life by offering the helicopter service at a cost of $59 until the end of September. However, the service is available only if weather conditions allow it, which in the New York area, can often leave travelers disappointed. To bring the in-flight experience for business first travelers closer to the experience of eating in a gourmet restaurant, meals are created by celebrity chefs. The wine for the business first cabin is selected by sommelier David Gordon, wine director of one of New York's landmark restaurants, the Tribeca Grill, which is co-owned by actor Robert De Niro. The lucky business traveler will be able to be part of the experience of Continental's "Chef on Board" service. The service involves having a member of the 12 airline's Congress of Chefs team, travel on selected flights and personally supervise the preparation and serving of meals in business first. This initiative also provides chefs the opportunity to discuss in-flight cuisine with customers and flight attendants. Much can be argued about tastes, which are often related to particularities of a country, culture and religion. Israel clearly fits into this category and demands that Continental have its own panel of Israeli experts who advise the airline on kosher and non-kosher meals. One of them is celebrity chef Mika Sharon, who has her own cooking program on Channel 10 and owns the Libra restaurant in Tel Aviv, as well as celebrity chef Haim Cohen, who has a weekly cooking show on Channel 1. The writer was a guest of Continental Airlines and Marriott Hotels.