Arkia Airlines Ltd. will begin flying new immigrants to Israel for the Jewish Agency, thus ending the monopoly that El Al Israel Airlines Ltd. (TASE:ELAL) has held for decades.
Based on data published in the past, El Al earned $2.5 million annually from services provided to the Jewish Agency.
There was recently a major dispute between the Jewish Agency and El Al after the carrier attempted to unilaterally raise fares by 5% in their new agreement.
El Al retreated from its price hike but even so the Jewish Agency asked other carriers to submit bids and has agreed to allow Arkia to bring immigrants from all the foreign cities that it serves.
A final decision has not been taken by the Jewish Agency as to whether El Al should continue enjoying its monopoly in bringing new immigrants from North America. El Al is the only Israeli carrier serving North America, but the Jewish Agency is considering allowing foreign airlines to bring immigrants.
Arkia CEO Gadi Tepper said that as part of their new agreement the carrier would give the Jewish Agency preferential rates, and will allow immigrants to bring excess baggage. Arkia will also operate special flights only for immigrants.
Over the past year, 15,875 immigrants have come to Israel. An additional 1,000 immigrants are expected in December on Arkia flights from Paris. Arkia will also fly in immigrants from Ukraine in December on the new route the carrier is inaugurating from Kiev.
El Al's share was unchanged today at NIS 1.00.
Published by Globes [online], Israel business news - www.globes-online.com - on November 30, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009