Open Skies Pact Seen Yielding Benefits


The Israeli cabinet’s decision last month to ratify an Open Skies deal with the European Union will relax restrictions and quotas on flights between Israel and the EU.

The move, according to Haim Gutin, Israel’s tourism commissioner for North and South America, could increase the number of flights, cut airfare in half and attract another 500,000 tourists.

“We now have to market [the deal] to the different airlines,” he said. “It is our hope that by next year there will be open skies from Europe to Israel. But it has nothing to do with the United States.”

The government’s decision to ratify the agreement sparked a two-day strike by unions of El Al and two smaller Israeli airlines, Arkia and Israir. The strike ended when the Israeli Finance Ministry agreed to pick up an increased share of the airlines’ security costs. The Histadrut, Israel’s major labor federation, said the state would now pay 97.5 percent of Israeli airlines’ security costs, up from the 70 percent it had been paying.

Darryl Jenkins, president of the American Aviation Institute, a private think tank, said such agreements do result in “more traffic in and out of the country. It allows airlines to fly as many flights into the country as the airport can handle without any restrictions.

“As the frequency of flights increases, you get lower prices,” he said. “And that’s good for consumers.”

Before entering into the agreement with the Finance Ministry, El Al Israel Airlines had issued a statement saying the agreement provided “unfair competition” to the Israeli aviation industry. It noted that most other airlines are part of a large international airline alliance that El Al has been excluded from “for obvious political reasons.”

“The fact that we are not able to join an alliance severely restricts our global operations and destinations served,” the statement continued. “An airline alliance can be compared to having one airline with thousands of aircraft, whereby all Israeli carriers have a combined total of less than 50 aircraft.”

Jenkins agreed that Israeli airlines are at a disadvantage because of their exclusion from the international airline alliance.

“If you are part of an alliance, it gives you a large number of destinations you fly to without having to increase your fleet by one plane because you are able to put your flight code on everyone in the alliance,” he said. “It’s a marketing arrangement. So if El Al had a codeshare with Jet Blue, I could fly from Israel to New York on El Al and then anywhere in the U.S. on Jet Blue with the same ticket. So it’s more convenient, you don’t have to recheck your bags, it’s easier to book, and you can use your frequent flier miles on any airline in the alliance.”

A spokeswoman for El Al said she could not comment on the Open Skies Agreement beyond what was contained in the airline’s earlier statement. In that statement, El Al had pointed out that anti-trust laws in Israel are “much stricter than in European countries, making it almost impossible for El Al to maintain codeshare agreements with the same flexibility enjoyed by European carriers.”

Jenkins said anti-trust immunity is critical for members of the alliance because “the airlines work as though they were partners.” ◆