Travel Adviser: Open skies don’t always fly

The “Open Sky” agreement with the EU, opposed by Israel's airlines, is set to commence early next year.

Elal plane 311 (photo credit: Courtesy)
Elal plane 311
(photo credit: Courtesy)
One of my favorite films, originally a play on TV, is Twelve Angry Men. Those of you who’ve seen the original film in 1957 will remember that Henry Fonda played the original dissenter in a jury trial deliberating on a homicide trial. Originally the other 11 members of the jury voted guilty, until Fonda’s character plants a seed of reasonable doubt, forcing the others to examine their own values. Caustic and disconcerting, riveting and riotous as slowly but surely one realizes that appearances can be deceiving.
So when I hear that the CEO, chairman, comptroller and head of the unions at El Al, Arkia and Israir are all lamenting the Open Skies agreement, all that comes to mind is Twelve Angry Men. Bemoaning and berating that they cannot compete leaves me doubting their sincerity.
The “Open Sky” agreement is an aviation agreement between Israel and the European Union that was recently signed. In theory, it’s designed to encourage competition among airlines and by reducing air fares, and increase the number of European tourists visiting Israel. Conversely, it should also lead to lower fares to more cities by more airlines for the Israeli traveler.
Negotiated over the past three years, implementation will only commence next April and will be introduced over five years to be completed in 2018.
Championed by Tourism Minister Stas Meseznikov, who has lobbied hard for this agreement, it was initially opposed by Transportation Minister Israel Katz, who was eventually won over due to the agreement’s promised benefits.
His comment at the signing, asserting that he believed in the Israeli airline managers’ ability to adapt to this new world order, brought a smile to the face of most industry insiders. Why? Because they know that the leaders of El Al, Arkia and Israir are quite simply incapable of making the changes necessary to compete with the Europeans.
For example, the budget carrier Easy Jet has made huge inroads into the Israeli market, with Arkia and Israir unable to respond with any measure of effectiveness.
The Israeli airlines tend to think short-term and react emotionally to events, with little evidence of foresight or long-term business plans. Routes are opened, then closed; specials are dangled in front of the public, then snatched away. Idle when they should be busy, and busy voicing opposition, the heads of these three airlines need to take their heads out of the clouds and put their feet on the ground. Over-staffed and outmatched, they have good reason to be worried.
It’s not the government’s role to protect Israeli companies in an unfair manner. The airlines could, if they so elected, absorb the bloated pension plans of El Al and offer early retirement packages to sharply reduce their personnel. Employees with tenure at El Al have voiced their opinion that with the right offer they would happily retire.
The Histadrut is threatening strike action as this agreement comes to fruition; better they should push for good severance pay packages combined with retraining of these airline’s employees.
What the government does need to do is set up some sort of mechanism to protect the flying public from the legion of airlines that fly in and out of Ben-Gurion Airport.
A recent example provides a useful illustration of the larger challenges of “Open Skies.”
The Lembergs booked a package to Rome from Sunday until Wednesday. A quick four-day jaunt, complete with a moderate hotel, to visit the Trevi fountain, lounge at the Spanish Steps, explore Vatican City and walk throughout the city was planned. They booked with a travel agency, who sold them the flight and hotel with Arkia. Arkia bought the seats for the charter from another Israeli wholesaler, that chartered a plane from an Italian airline called Wind Jet.
Mr. Lemberg, with his wife and sister, showed up at Ben-Gurion Airport at the crack of dawn, only to be met by an Arkia representative who told him that Wind Jet had gone bankrupt overnight, and thus they could not fly him to Rome.
No compensation was offered, no offer to send them on another airline was raised, and the sleep-deprived passengers left the airport and headed home. The Arkia representative was quite clear: the money Mr. Lemberg paid for both the plane ticket and the hotel accommodations was lost.
The head of the Israeli Travel Agents Association had also taken to the media to give credence to this stand; that when an airline goes bankrupt, the consumer, and the consumer alone, must shoulder the burden.
“What a load of crock” was my retort when contacted that afternoon by the aggrieved passenger. While they may lose the price of the airline ticket, Arkia’s inability to refund the price of the hotel bordered on criminal negligence.
Speaking to Arkia employees, I was bounced around like a piece of lost luggage until senior management agreed that I had a valid point. Their plea that they simply purchased it from another Israeli wholesaler was also absurd.
Their initial gambit of taking no responsibility was infuriating.
The shiny new Open Sky agreement is designed to be consumer friendly. By the end of the five-year period, there will be complete competition between Israeli and the EU. Every airline will be authorized to fly to any destination as many times as it wants.
If Air France elects to fly Tel Aviv-Rhodes 10 times a day, it can. Obviously the Israeli airlines don’t have the number of planes that all of the European Union airlines have, and will have to intelligently select which routes and which cities to invest their resources in. Obviously, Israeli airline managements will need to review carefully their longterm strategies and the benefits they can offer the flying public.
The Israeli government, though, must demand some type of a bond from any airline able to fly into Israel, protecting clients from being stranded. While we make certain that airlines that fly into Israel are structurally safe, physically secure, why are we not concerned about their financial stability? Over the past year, we’ve seen a Spanish airline and Hungarian airline cease operations literally overnight.
We’ve seen passengers forced to pay hundreds of dollars to get back home. We’ve seen consumers’ hard earned savings flushed away as no government protects their claims.
The Wind Jet fiasco had an unexpected result. Its closure was the result of a failed merger with Alitalia, but the owner of the company felt a personal responsibility. Chartering another plane, he flew the stranded Israeli passengers in Rome back to Israel for a nominal fee.
Mr. Lemberg called me late in the afternoon stating that Arkia had offered him a flight at 10:30 p.m. and asked if I thought he should take it.
“I’ve already lost one day of my four-day trip,” he explained.
Firmly reiterating what he had told me – that Arkia informed him that his entire package was lost – I simply asked: did he prefer to fly that evening missing one day and worry about compensation for that amount, or to start a court process that could drag on for years? I’m certain I heard him smiling as he asked me how early he needed to be at the airport.
To conclude: no government, Italian or Israeli, stepped forward to assist their stranded citizens. Private enterprise rose to the occasion. It will be privately run, creative and innovative Israeli airlines that we will need to compete with the Open Sky Agreement.
More often than not, I bemoan the huge chasm between Israeli airlines and their consumers. We all want El Al to exist; what we don’t want is for it to return to being a government-owned airline. To all the senior management: Now is not the time to close your eyes and pray. Now is the time to open your eyes and lead!
Mark Feldman is the CEO of Ziontours Jerusalem. For questions & comments, email him at [email protected]