In times of crisis, Israeli tourists rely on the domestic airlines. Among other things, the three Israeli airlines are expected to overcome the challenges, and provide a response to the hundreds of thousands of Israelis whose flight back to Israel was canceled and are left stranded abroad. In the days after October 7, they mobilized in a variety of ways and it happened again at the beginning of August, when there was another wave of cancellations by foreign airlines fearful of Iranian reprisals. But the ability of Israel's airlines to keep flying, despite the geopolitical tensions, literally has a price in the fares that passengers must pay.
Passengers have no choice but to pay high fares despite problematic service. But it is hard to predict what the consequences for these airlines will be the day after the war, when tourists will once again have a choice on which carrier to fly.
On Monday, for example, passengers on an Arkia flight scheduled to take off from Athens for Israel were surprised to find that the airline was looking for volunteers to agree to switch to an alternative flight, following a last-minute plane change, which had led to a shortage of eight seats. Arkia said that the replacement of the plane was not under the control of the company.
It has not only been Arkia experiencing unusual disruptions. Social media are full of complaints about delays and lack of response in real time by all Israeli airlines. A passenger who planned to fly with Israir to Paphos in Cyprus on the (Sunday) morning of Israel's pre-emptive strike on Lebanon, tells "Globes" that she waited more than eight hours in Israel. Apart from an email about the cancellation of the flight, she was unable to receive any response from the airline. The passenger scheduled another flight for that evening, but this was also canceled.
The problem of leased planes
According to Prof. Yaniv Poria of Ben Gurion University's Department of Hotel and Leisure Management, in the near future we will see more and more airlines dealing with the consequences of overbooking - an accepted method of selling more tickets than the number of seats on the plane. Poria stresses, "This is not shady dealing, but a common and legal phenomenon in the industry. This is the airlines' way of protecting themselves from losses. Moreover, passengers who buy tickets in premium class may find themselves in tourist class due to overbooking."
Why does this happen? Airlines know that that every flight has a certain amount of cancellations. There are also situations where passengers have pre-purchased tickets with the possibility of cancellation, such as in business class, and the company needs to estimate how many will ultimately choose not to fly.
Poria says, "I appreciate that today the companies are allowing for a bigger margin, because the amount of cancellations can currently be huge. This can explain the severity of the phenomenon at the moment. It doesn't happen because the airlines are bad, but because sometimes they have to change planes without any choice, or a plane breaks down and they are replaced by a smaller one.
"In addition, to some extent a state of war is better for an airline. This is an event that can be defined as force majeure, and sometimes the company is not obliged to compensate the passenger." Poria explains that in overbooking situations, ground crew will try to find the passengers who are the easiest and cheapest to compensate. "The compensation for those who voluntarily give up their seat, compared with those who wanted to fly and did not sign a waiver, is half or even a quarter of the amount," he said.
The courts may also rule in favor of the passengers if the airline ignores them, since it sells tickets knowing that there is an increased risk of cancellations, and therefore has a certain responsibility.
Another reason for flight cancellations is due to the use of leased planes. In cases where Israeli companies perform a "wet" (short-term) lease (which also includes foreign crews), the flight may be canceled because the pilots and air crews are afraid to come to Israel.
El Al's fleet, which includes 49 aircraft, includes only three leased planes - a relatively negligible number that should not dramatically affect flights. Israir, on the other hand, operates a fleet of nine planes, of which four are leased. Arkia has the smallest aircraft fleet (only seven), including two leased aircraft. Clearly, thelikelihood that Arkia and Israir flights will be canceled is higher than for El Al, due to the ratio between the leased and non-leased planes.
"A minor percentage of cancellations"
Israeli airlines have received extensive public criticism regarding the prices of their flights. The CEOs of El Al, Israir and Arkia, were even summoned to a meeting with Minister of Economy and Industry Nir Barkat last week because of these complaints. The meeting Barkat had with El Al CEO Dina Ben Tal Gnancia, resulted in an intriguing compromise, in which El Al will operate discounted round-trip flights to four destinations, from where Israelis can board connection flights to other destinations worldwide. The destinations are Athens ($299), Larnaca ($199), Vienna and Dubai ($349).
The decision to produce uniform prices specifically for destinations where there is competition is puzzling. More than five airlines compete on the routes to Larnaca and Athens, so the decision mainly helps El Al to fill its planes on these competing routes. On Tuesday morning, it was not possible to purchase tickets at all from Athens and Larnaca, the biggest demand destinations. El Al has added flights to Larnaca over the coming days and to Athens next week.
At a time when El Al is filling planes to capacity, its Israeli rivals are still offering seats for next week, but at extremely high prices. For example, for flights on sale Tuesday morning from Athens to Tel Aviv, a one-way ticket on Israir cost $512, and on Arkia $899.
Israir said, "The extensive wave of cancellations has also affected foreign crews employed with wet leases. As a result, there were cancellations and changes in the times of the flights operated by these crews. In some cases we found alternative solutions, and in some cases, unfortunately, no alternatives were found for passengers. We feel deeply about these cancellations, which make up a minor percentage of those who fly with us."
Arkia said, "Unlike other Israeli companies, due to Sunday's events when the airspace was closed, Arkia arranged accommodation for all passengers and an alternative flight. The company canceled only two flights. In two delays that were over eight hours, in Larnaca and Batumi, Arkia arranged hotel accommodation and an alternative flight as quickly as possible. The company never cancels flights without the possibility of an alternative flight by it."
Arkia CEO Oz Berlowitz said, "As every year, it should come as no surprise that the last week of August has the highest prices. As with any airline in the world, prices are determined by supply and demand. The last seats will always be sold tens of percent more than a flight which still has 30 seats available. In Israel, since a number of companies have canceled and added flights to destinations such as Athens and Larnaca - which leave Israel empty - the return fare takes into account the cost of flying out empty."
Published by Globes, Israel business news - en.globes.co.il - on August 27, 2024.
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