The return of US airlines to Israel and Arkia's entry into the direct flight market between the US and Israel had raised hopes for a fall in airfares. However, at least in the coming months, it seems that fares aren't dropping to the prices before the war.
Since the start of the war, the airfares that have risen in price more than all others have been on direct flights between Israel and the US. Due to limited supply and the disappearance of US airlines from the Israeli market, El Al remained the sole carrier operating direct Tel Aviv - New York flights.
Passengers looking for alternatives were forced to seek out connecting flights, but even in this market segment it was not easy to find tickets - mainly due to the absence of European airlines. In practice, a situation was created in which a return ticket for $1,200 between Tel Aviv and New York was not considered expensive.
Supply is not keeping up with demand
Ticket prices to the US in the coming months will continue to cost at least $1,200, according to Ophir Tours, with most fares still ranging between $1,500 and $2,000, or even more. During Passover, for example, Delta Airlines is offering the cheapest return tickets for direct flights to the US - starting at $1,600.
El Al, the only airline which has operated uninterrupted since the start of the war on this route, and marketed tickets throughout this period, already has no economy class tickets left for Passover, so that fares begin at $2,300. Where El Al economy class tickets are available on the Tel Aviv - New York route, they move, according to the algorithms, between a minimum of $799 and maximum of $1,795.
Three additional airlines will now be operating Tel Aviv - New York flights. In practice, this is not an increase in the number of airlines, but rather the same number of companies that operated before the war broke out - with a slight but significant change. Before the war, the airlines operating between Tel Aviv and New York were El Al, United Airlines, Delta Airlines and American Airlines. Starting this April, American Airlines, which has not yet announced its return to Israel, will be "replaced" by Arkia.
Arkia entered the Israel - US market two weeks ago with three weekly flights between Tel Aviv and New York - a negligible number compared with the dozens of flights previously operated by United, Delta and American. Arkia also has major disadvantages compared with its rivals by not having codeshare agreements with foreign airlines, nor does it have a loyalty club that allows accumulation of points and benefits on connecting flights, making it less attractive to frequent flyers and business travelers.
In other words, even the additional flights, due to the partial return of US airlines, are not enough to return airfares on direct flights to the US back to pre-war levels - and until flights return in full force, it is difficult to expect fares to fall.
Additional external factors also affect ticket prices. The shortage of spare parts and aircraft worldwide and the inability of aircraft manufacturers to keep up with production are increasing airlines' costs. Airfares are rising all over the world, and airlines, especially those operating transatlantic flights, are particularly affected.
Consequently, in the coming months, Israel may experience "revenge buying" - a phenomenon that also occurred after Covid. Many passengers, who have been denied the opportunity to fly for a long period , will be willing to pay high prices for tickets, which will allow companies to maintain high fares without fear of a drop in demand.
Compromising for a cheap ticket
Those looking for alternatives to expensive direct flights to the US will find cheaper alternatives on connection flights, with a difference of more than $100 per ticket, in some cases. "Globes" found that tickets can be purchased for less than $1,000 on Emirates, for example, which offers flights with a stopover in Athens using a codeshare with Aegean; LOT, which operates flights to the US with a stopover in Poland; and British Airways, which offers flights to the US via London. Waiting times on these flights range from a few hours to a long wait of about seven hours, or an entire night. The good news is that towards the end of the year, after the summer and holidays, fares are expected to drop, as they do every year.
Published by Globes, Israel business news - en.globes.co.il - on February 19, 2025.
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