Israir Group (TASE: ISRG), controlled by Rami Levy and managed by Uri Sirkis, is making moves to acquire its competitor Arkia, "Globes" has learned.
As far as is known, the impetus for the deal is the severe difficulties currently plaguing Arkia. In the first three quarters of the year, Arkia reportedly incurred losses of approximately $30 million, and it is projected to end the year with a total loss of $50 to $60 million.
According to the company’s website, Arkia’s fleet consists of seven aircraft that it owns and eleven others under "wet lease" (aircraft leased together with their crews from other airlines). Arkia operates flights to New York, Bangkok, Phuket, Hanoi, London, Paris, Zanzibar, Tbilisi, Batumi, Rome, Barcelona, Amsterdam, Budapest, Dubai, Tirana, Minsk, Sofia, Lisbon, Baku, Prague, Athens, Thessaloniki, Larnaca, Crete, Mykonos, and Paphos.
El Al Israel Airlines (TASE: ELAL) is also eyeing Arkia and exploring the feasibility of a potential deal, "Globes" has learned. However, industry sources say that the chances of such a move are probably low from a regulatory standpoint. It is considered highly unlikely that regulators will approve the acquisition of Arkia by the largest airline by far at Ben Gurion Airport.
In the first three months of this year, El Al’s market share at Ben Gurion Airport was 37.8%, with the airline transporting 5.1 million passengers. This figure represents a decline in comparison with the previous two years, during which El Al’s dominance at the airport was even greater as a result of the war and the suspension of flights to Israel by foreign carriers.
Arkia said in a statement: "The matter of selling or merging the company rests with the shareholders and is not a concern for the company's management, which remains focused on managing ongoing operations, serving customers, and continuing the company's development. As a private company, Arkia does not disclose its financial data; therefore, any reports or estimates regarding its financial results should not be treated as official figures from the company.
"Even during the current challenging period, with rising fuel prices and a shifting geopolitical landscape, Arkia continues to operate responsibly, making necessary adjustments while prioritizing its customers, employees, and the continuity of its operations as an important airline."
The Nakash Group stated: "In the light of the situation the company has found itself in under the management of CEO Oz Berlowitz, the shareholders are working vigorously to rehabilitate the firm and are exploring various alternatives, both in Israel and abroad. Concurrently, brothers Ralph, Joe, and Avi Nakash have appointed Avi Hormaro, CEO of the Nakash Group, to manage the situation on their behalf."
Israir stated: "Following recent media reports, the company wishes to update that it has been approached regarding the potential acquisition of Arkia. Should the company examine this matter and reach a decision, it will provide disclosure in the customary manner, in accordance with legal requirements. The company wishes to clarify that there is no certainty that this examination will culminate in a transaction, and it does not constitute any form of commitment or promise."
What’s the benefit for Israir?
If Israir succeeds in acquiring Arkia, it will gain access to its "slots", the air routes Arkia operates to the Far East, Europe, and the US. This is particularly significant given the current shortage of slots at Ben Gurion Airport, a situation highlighted during the conflict with Iran, when US refueling aircraft occupied parking positions at the airport, displacing passenger flights to and from Israel.
Israir will also gain Arkia’s workforce, and will benefit from operational synergies between the two companies. Furthermore, it will remove its primary competitor from the market.
For the year-to-date, Arkia ranks as the third-largest airline at Ben Gurion Airport, handling 1.44 million passengers (approximately 10% of the airport's total passenger traffic).
Israir holds the second position, with 1.56 million passengers and an 11.7% market share.
The question, of course, is whether the deal will be approved by the Competition Authority. On the one hand, the Authority does not want to see a major competitor exit the market; on the other, it does not want to witness the collapse of Arkia, which is currently on a path toward deferring debt repayments.
Arkia is embroiled in a dispute between the employees, who hold a 20% stake in the company (down from an original 30% following dilution), and the company’s owners, the Nakash family, which holds 89% of the shares. This conflict stems from the significant losses Arkia has been incurring.
While no strike has yet been declared, if one takes place, it could disrupt the travel plans of thousands of passengers later this year. Yesterday, employees held a demonstration outside the company’s headquarters.
Published by Globes, Israel business news - en.globes.co.il - on November 4, 2026.
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