“The state should undertake to fully pay the security costs of Israeli airlines, so they can compete on equal terms with foreign airlines,” said Israir CEO Israel Ben-Ham. “Otherwise, Israelis will fly other airlines that offer cheaper fares.”
Ben-Haim said that tour organizers, including those affiliated with Israir Airlines and Tourism Ltd., such as Natour Travel Agent Association for Organized Tours and Unitel Tourist & Air Ltd., often prefer making reservations with foreign airlines because their low fares. “We’re talking about giving Israeli jobs to foreigners. As Israeli airlines shrink, foreign airlines grow,” he said.
He claims that the Ministry of Transport is calling for cutting prices for infrastructures for foreign airlines as an enticement to fly here, even as it imposes more costs on Israeli airlines. For example, the ministry decided to raise charges for airlines in order to cover costs of the Israel Airports Authority, which reduces the competitiveness of Israeli airlines.
“It is now clear that, out of all of the recommendations of the Siterman committee, the recommendations easing terms for foreign airlines will be accepted, and not those for helping Israeli airlines cope with their security costs,” Ben-Haim says. The committee has not yet published it report.
Israir recently decided to invest $140 million to purchase two 170-seat Airbuses, which will replace 225-seat Boeings. The new planes will give the airline greater flexibility, enabling it to fill the planes faster, save on fuel costs, and speed up turnaround time. The airline is also considering leasing or buying more planes, and recently completed the training of Israeli pilots.
Ben-Haim said, “Israir is ready to greatly expand its activity, but this is subject to our ability to compete on an equal footing with Israeli airlines like El Al Israel Airlines Ltd. (TASE: ELAL) by giving us designated carrier status to more cities around the world, as well as against foreign airlines.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 26, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007