El Al to launch low-cost flights to Europe

El Als campaign is in response to the rising competition as part of the Open Skies policy being promoted by the Transport Ministry.

From March, El Al Israel Airlines Ltd. (TASE: ELAL) will operate 5 Boeing 737 airplanes on their low-cost flights. Budapest, Berlin and Prague will be among the destinations, and possibly Cyprus and Greece. Popular business routes, such as Frankfurt and London, will not be replaced with low-cost flights. El Als campaign is in response to the rising competition within the framework of Open Skies policy that is being promoted by the Ministry of Transport.

If all goes according to plan, regular service to these destinations will be halted as early as Passover, and all ticket sales will be carried out within the low-cost program. The low-cost fare structure is built on a base ticket price, with charges for extras, such as seating upgrades, luggage, check-in, etc.

Unlike other low-cost carriers, who sell tickets exclusively online, El Al will allow low-cost tickets to be sold by travel agents as well. El Al will also be subject to Israel airline regulations (with regards to cancelling tickets or compensation for delays), unlike other low-cost carriers who do not have representation in Israel.

El Als previous attempt to sell cheap fares through a separate department (Basic) on its flights to Europe failed. Three years ago, El Al offered discount fares that did not include check-in or meals. Three months after launching the deals, El Al decided to end it, as it was not worthwhile financially.

The El Al flights will depart from the main terminal, Terminal 3, and not from the new area of Terminal 1 that opened last week to serve low-cost flights. According to the Israel Airports Authority, 55 international flights per week are expected to pass through the new wing this winter. As part of the implementation of the Open Skies policy, the government decided to approve all slot requests from low-cost carriers, and of the 55 weekly flights that are scheduled to run this winter, 22 are newly approved. From the summer of 2014, it will be possible to run 130 weekly flights (25-30 daily flights), and next winter 100 weekly flights are expected. Fifteen airlines operate low-cost flights from Israel to destinations in Europe, and due to the Open Skies policy, the list is expected to grow, and the competition over Israeli passengers will intensify.

The company said, El Al is forming plans for the beginning of Short Haul operations, with five Boeing 737-800 airplanes, to destinations that will be set and publicized by the companys management. The plan is to begin operating in this area no later than the 2014 summer schedule.

Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2013

Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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