Was the crisis in recent days between UK budget airline British Midland (BMI) and the Ministry of Transport necessary, or was it artificial?
The first BMI flight will land in Israel today. In recent weeks, Ministry of Transport director general Gideon Siterman threatened to bar the airline from launching its service to Israel, as long as it did not secure good slots at UK airports for El Al Israel Airlines (TASE: ELAL) and another as yet unnamed designated carrier. Siterman said, by way of explanation of his decision, that it was his duty to represent the interests of Israeli airlines, and that he would he stand by his decision resolutely, even it meant a crisis with the UK Department of Transport and BMI.
At the beginning of the week, Siterman announced that the crisis had been settled and that the British had promised to earmark slots for an Israeli airline. El Al was astounded to discover that it had been left out of the agreement, and that the undertaking to reserve better slots applied solely to the other designated carrier on the London-Tel Aviv route. This is expected to be Israir Airlines and Tourism Ltd., after Arkia Airlines Ltd. announced it was not interested in this route.
BMI is represented in Israel by tourism company Open Sky Ltd., owned by Nochi Dankner and Avi Fischer, who also control Israir. This fact diminishes the Transport Ministry's achievement since it now transpires that not only has it failed to safeguard El Al's interests, but that BMI would have probably secured good slots for Israir without it acting as mediator.
Siterman said in response, that the agreement with the British on reciprocity applied to new carriers only. He added that he did not know as yet which airline would be selected as the second designated carrier on the London-Tel Aviv route.
BMI confirmed that it is represented in Israel by Open Sky, which is owned by Clal Industries and Investments (TASE: CII) subsidiary Clal Tourism Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2008
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