Gov't lifts Lufthansa capacity freeze [pg. 17]

The Civil Aviation Authority has renewed Israel's aviation agreement with Germany, the Transportation Ministry said Tuesday, ending a capacity freeze that limited airliner Lufthansa on the Tel Aviv route. The agreement marks a significant change in aviation policy for the government, which had introduced the limitations in an effort to protect local companies over the slow years in tourism. "The decision shows that the government is starting to listen to the industry and has accepted that things have to change," said one industry observer. Lufthansa had petitioned the High Court of Justice to reverse an order from the Transportation Ministry order in November 2003 to cut its capacity on the route, and sought a compromise by agreeing to maintain its status quo until the end of the Winter 2006 season. The compromise stipulated that the two sides would meet before the new season, which starts March 28, to discuss new terms of the bilateral aviation agreement between the two countries. The meeting took place this week in Bonn, Germany. As a result of the deal, Lufthansa will be the first airliner to operate the world's longest airliner, the Airbus A340-600 to Tel Aviv, using the plane on its night flights from Frankfurt to Tel Aviv and the morning return. The move, which takes effect at the end of March, will allow Lufthansa to increase its passenger count by 115 per flight, translating to 7,000 more people each month. The airliner operates the Boeing B747-400 on its second daily flight from Frankfurt. "Our ability to increase the number of seats on the route to Israel will allow Lufthansa to continue contributing to the Israeli economy by bringing thousands of tourists each month from Germany as well as other parts of the world," said Ofer Kisch, Lufthansa Israel General Manager. The agreement allows each respective government to designate 18 weekly flights between the two countries. Accordingly, Lufthansa will continue to operate 14 flights per week, while Hapag-Lloyd Airlines, a subsidiary of German tour operator TUI, will fly four times per week from Munich to Tel Aviv as a scheduled carrier on the route, signalling the first time a European country has granted designated carrier status to a second airline.