JERUSALEM (Jun. 19)
Transportation Minister Gad Yaacobi has flatly rejected the recommendation by a firm of American experts that Israel lift its ban on charter flights in order to boost its sagging tourist trade. A report submitted by the Minister to the Knesset Finance Committee contended that charter flights would not substantially increase tourism but would decrease the revenues of El Al, Israel’s national carrier and of foreign airlines which would cause them to out down their service to Israel. The only charter flights permitted to Israel at present are those of Christian pilgrim groups and of Scandinavian nationals.
Charter flights are bitterly opposed by El Al but are supported by the Israel Hotel Association whose members are dismayed by their current high vacancy rate. The American firm of Dixon-Spears, commissioned by the Ministry of Tourism to conduct a study of the problem, cited the high cost of transportation as a major cause of the reduction of tourist traffic and recommended charter flights as a solution. The Ministry of Tourism supports this conclusion.
Yaacobi questioned their premise, however. He claimed that charter fares would not be significantly cheaper than the present group flight fares during the slack season and said that during the three-month peak season, his Ministry would negotiate with the U.S. government for a reduction of group fares. Yaacobi also argued that the tourist slump was not due to high air fares but the result of world-wide economic recession. Any marginal increase realized by charter flights would be off-set in money terms by the loss to El Al, Yaacobi contended. He said the charters would also decrease the profitability of foreign airlines serving Israel which would cut back their schedules and, since landing rights are based on reciprocity, this would boomerang against El Al’s landing rights overseas.
QUESTIONS CLAIM BY HOTEL OWNERS
Yaacobi argued further that cheap charter flights from Israel would encourage Israelis to travel abroad, spending much needed hard currency. He also questioned the hotelmen’s claim that charter flights would boost their business. According to Yaacobi, the patrons of charter flights stayed at inexpensive hotels while the hotels in Israel that are suffering must from declining tourism are the expensive ones in the four and five-star categories.
Yaacobi proposed that instead of charter flights, the government subsidize El Al to enable it to reduce its fares and provide cheaper package tours for American tourists. Minister of Tourism Moshe Kol was reported to be undecided whether to pursue the matter of charter flights at the Cabinet level. Meanwhile, the Hotel Association held a “crisis meeting” in Jerusalem at which it was reported that 12,000 hotel rooms go vacant every night as a result of the tourist lag.