After years of talks, threats and political pressure, the concluding session will be held on Tuesday, in which the aviation agreement between Israel and the EU will be formulated. There is no doubt that this will be a real revolution that will benefit passengers, tourists, prices, hotels, lines and services. The agreement will implement the extremely promising concept of "open skies," symbolizing free and full competition for flights to and from Israel. It is truly a dream come true.
But just as the clear blue skies are about to appear, it is worth discussing with full transparency the issue of the price to be paid. What can this agreement, in its present form, be expected to do for Israel's airlines? In no way will it harm profitability, and what is earned by controlling shareholders, and the high salaries drawn by managers and the vain conduct of employees in this sector.
Discretion does not require relating to the antics of the Histadrut's workers committee, which already declared a work dispute at the end of February at Israel's three airlines - El Al Israel Airlines Ltd. (TASE: ELAL), Arkia Airlines Ltd. and Israir Airlines and Tourism Ltd.. The Histadrut claims that "open skies" will hit the jobs and salaries of the 7,000 employees of the three airlines and the 25,000 workers in the sector.
Hitting national interests
The question of price need only relate to one thing: will the agreement harm vital national interests as defined in the "golden share." This was the share still held by Israel after the government privatized El Al.
The restrictions imposed by the government together with the defense establishment, in the name of these special rights, ensures that during times of tension and war when foreign airlines are likely to discontinue flights and close Israel's skies (as happened during the first Gulf War and Operation Cast Lead), the State can carry on operating flights as if it still owns El Al to fulfill emergency needs.
Does the "open skies" agreement being formulated harm the stability of Israel's companies, and especially El Al, to the extent that it hits Israel's security in terms of flights, routes, landing agreements, and operational capability? Is it worth thinking twice, and waiting before signing the agreement and continuing trying to improve and alter it? At the same time we could do what is required, and there is much, to improve Israel's airlines competitiveness.
Open skies are wonderful?
There is no doubt that Israel's airlines, and first and foremost El Al, are not popular. Nor does it seem that either the owners or the employees are making any major effort to become popular. Nine years after El Al was privatized, it still remains the same company it was under the government- problematic, bloated, heavy, wily, whining and inefficient. Even so it is worth pointing out that cabin staff service has improved. But the overall performance is reflected in the price of tickets, which are not competitive while financial results are unimpressive and passengers are leaving.
Despite all the problems let's return to the original question. Are open skies a good thing. Global competition is excellent but is the State of Israel able and willing to pay the price of conditions that are set in this huge agreement. There is no doubt that one minute after the agreement is approved, European airlines will take control of flights to and from Israel. They will achieve this through three strong alliances: Star with 26 airlines, One World with 12 airlines, and Sky Team with 15 airlines. The size, deployment and connection of these interests without any restrictions in Israel will bring about, intentionally or not, the weakening and even elimination of Israel's airlines.
El Al, Arkia and Israir are not companies in these alliances because the members prefer their connections with Arab airlines. Some years ago when the alliances were looking for members El Al might have been able to join, it is believed. But the airline made no effort to do so and now it is a problem that the government must cope with.
Into this pot we must also add one critical item: Israel's civil aviation has been neglected by the regulators for many years. After years of warnings, investigative commissions, revelations and the most lethally critical reports in both Israel and the US, which were deliberately concealed by the Ministry of Transport, the US Federal Aviation Administration lowered Israel's safety rating from the highest rating to two ratings lower. The reports stressed the worrying danger for civil aviation as set out in the 2007 Lapidot Report, which pointed to a "catastrophic situation" in Israel's skies with grave air safety defects.
For the past three years the Israel Civil Aviation Authority headed by Giora Rom has failed to restore Israel to the highest safety category.
It is clear that there is a heavy business and economic price that will worsen with "open skies." At the same time, even though the new Pilot's Law was finally enacted in 2011 by the Knesset, giving an effective legal infrastructure to civil aviation arrangements, there are still delays in implementing the required regulations.
So while there is an admirable national desire to sign an agreement with the EU, we should also swiftly handle our aviation ills. We must worry about protecting the landing rights of Israeli companies at key European airports and reasonable conditions of competition, while making a major effort, at government level, vis-à-vis the EU, to enable Israeli companies to join the worldwide airline alliances.