Sources inform “Globes” that El Al (TASE:ELAL) and Air Canada (TSX:AC) are about to end their longstanding business collaboration.
El Al and Air Canada have had a code-sharing agreement for many years, under which passengers of one airline could fly on the other.
Air Canada general manager for the Mediterranean, Israel and Africa Ruth Ben Tzur said the reasons behind the termination of the collaboration were solely professional and business. "The business cooperation agreement between the two airlines was designed to benefit both. It worked well, especially in a difficult period when most passengers on the Canada route were Israelis.
"Next month, we'll switch to a daily flight from the current five times a week, at which point there will be no need to continue the code-sharing. There are also major service differences between the two airlines. For instance, we have first class service on the Tel Aviv-Toronto route, whereas El Al does not.
"Besides this consideration, there was also an element of extortion on the part of El Al during the negotiations to renew the agreement. El Al wanted to reach more destination in the US, to which we would not agree."
El Al CEO Amos Shapira said in response that he was unaware that the code-sharing agreement was being terminated. "I haven’t studied the matter in depth, but Ben Tzur could be right. We might have asked to travel to more destinations in the US. That's legitimate."
Published by Globes [online] - www.globes.co.il - on June 3, 2004