Don't expect fares on flights to Asia to fall

El Al Credit: Shutterstock
El Al Credit: Shutterstock

Despite the opening of Saudi airspace, rising fuel costs and the lack of competition on flights eastwards from Israel, mean that airfares may not be cheaper.

The opening of Saudi Arabia's airspace to Israeli carriers on all flights to and from Israel is a 'game-changer' but expectations that flights to Thailand and elsewhere in Asia will be cheaper in another two weeks may not materialize.

Firstly, so that Israeli flights can shorten their routes to South and East Asia, Oman must also agree to open its airspace. Oman is expected to agree but has yet granted its consent. Secondly with more expensive jet fuel pushing fares upwards, even though flights to Thailand and India are two hours shorter, there is no certainty that prices will go down.

Even so the big news is that flights will be considerably shorter. Five hours 15 minutes from Tel Aviv to Mumbai instead of eight hours and only eight hours to Thailand and 15 hours to Melbourne. El Al can rethink launching direct flights to Australia, which is a similar distance away as Los Angeles. Israir and Arkia which fly to India and Thailand will also benefit from the shorter routes.

El Al can also revive the option of direct flights to Tokyo, which were canceled because of the Covid pandemic. The shorter five hour route to India means that El Al can allocate narrow-bodied 787s to the route and free up wide-bodied Dreamliner 787s for the Tokyo route.

Thus operational flexibility, savings in fuel, which is the main element in the price of air fares can allow airlines to manipulate matters in their favor for the benefit of the company. The price of tickets mainly reflects competition, so while El Al is the only Israeli carrier operating to Thailand at the moment, it will have no reason to significantly cut prices, although Arkia is considering launching flights to Thailand.

Aviation expert Joseph Fischer said, "The focus on the advantages produced from this for Israeli passengers misses the real advantage: opening up tourism to Israel from Asia, the world's most populous continent that has become a leading exporter of tourism."

Fischer points out that Israel has aviation agreements with countries that have not fully realized their rights like Japan, Australia, Thailand, South Korea, Singapore and more. "These agreements have not been realized so far because it was not economically worthwhile to operate flights on the long route."

Fischer also stresses the potential of incoming tourism with the shorter routes. "The shorter physical proximity will bring Israel closer to Christian pilgrims from the Philippines, India and Vietnam and the government should promote the topic with the required understanding and regard."

He also says that there could be up to 70% in savings in bringing cargo from Asia.

Published by Globes, Israel business news - - on July 18 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

El Al Credit: Shutterstock
El Al Credit: Shutterstock
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018