Israir Airlines and Tourism Ltd. today announced that it will suspend flights to New York on September 13 because they are not economical. The airline promised to find alternatives for all passengers who booked flights after this date.
This is the second time that Israir has suspended the route. A few months ago, it transferred the route to another airline, claiming that it was waiting to receive its new Airbus. Three months, the airline resumed the route with the Airbus, but is again suspending operations on it.
Israir obtained designated carrier status on the Tel Aviv-New York route after a long struggle against the Ministry of Transport and El Al Israel Airlines Ltd. (TASE: ELAL). At the height of the struggle, El Al petitioned the High Court of Justice, claiming that the state had violated its promise of exclusivity on the route.
A Ministry of Transport committee ultimately ruled that there was room for two carriers on the Tel Aviv-New York route because of high demand. After the route was opened to competition, the ministry decided to open other routes, including to the UK, France, Spain, and other countries, and declared its support for "open skies". Both Israir and Arkia Airlines Ltd. applied to obtain designated carrier status on some of these routes.
Israir reportedly decided to suspend its New York flights because of escalating fuel prices and in expectation of a drop in the number of passengers to and from the US because of the weakness of the dollar.
Published by Globes [online], Israel business news - www.globes-online.com - on August 6, 2008
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