Almost 700,000 Israelis have flown on Turkish Airlines since the beginning of the year, 15%, more than in 2015, making Turkish Airlines the leading foreign airline in Israel. More than 85% of the Israeli passengers landing in Istanbul switch to a connection flight on their way to a variety of destinations, mainly in the US and the Far East.
Turkish Airlines is not the only such airline. Israelis are voting with the feet. More and more passengers are forsaking the convenience of direct flights in favor of connection flights to another destination. The main reason is obviously the price, but it is not the only factor. Another consideration is the accumulation of frequent flier miles or points, the favorite sport of business passengers who fly frequently.
Members of frequent fliers clubs for several airlines can accumulate more points or miles when they fly on any of the companies included in the club. One such club is Star Alliance, which has 28 member airlines, including Lufthansa, Swiss Air, United Airlines, and Turkish Airlines, while the One World club includes British Airways and American Airlines.
Accumulating miles on every trip, and the ability to convert them into bonus flights, is a more significant consideration mainly for those flying business class, for which the accumulation ratio is twice as big. In other words, a passenger who frequently travels to Hong Kong, for example, will prefer a connection flight on Lufthansa or Turkish Airlines to a direct El Al Israel Airlines Ltd. (TASE: ELAL) flight, if only for the purpose of accumulating Star Alliance miles usable for a number of companies. In addition, these clubs offer ticket flexibility - the opportunity to fly with one company and return with a different member airline.
El Al frequent fliers accumulate points mainly when they fly El Al, because El Al has agreements with several airlines not frequently used by Israelis, such as Qantas, an Australian airline, and Aeromexico. Furthermore, passengers flying to the US who want to avoid a long procedure at immigration stations in New York on their way to a different destination in the country choose to fly via Europe and take a direct flight from there to their US destination, where the immigration procedure is shorter.
Geographic location is critical
In addition to these considerations, there is intensive competition between the airlines. Given Israel's opens skies policy and the entry of a number of airlines into Israel, there is a large supply of flights to every destination with a broad range of prices, reflecting the worldwide erosion of ticket prices, due to fuel prices, among other factors.
In the bottom line, use of connections flights is no longer confined to young passengers and backpackers seeking to save money. Many business class and private passengers are choosing to fly by way of an interim destination, especially when a trans-Atlantic flight is involved.
"The use of connection flights began to catch on three years ago, when Turkish Airlines was clever enough to exploit its most valuable asset, Istanbul's geographic location, with effective operational planning," says Ofer Azoulay, CEO of Eshet Business Center, the business arm of Eshet Tours. "Geographic location is critical for operating connection flights, highlighting intercontinental hubs like Istanbul and Moscow. Turkish Airlines dropped its prices in order to attract passengers and fill flights, leading the veteran European airlines to launch attractive prices for connection flights, thereby generating competition. Today, Russian airline Aeroflot is contesting this segment through its home airport in Moscow, which offers connection flights to 70 destinations."
Azoulay says that airlines have adjusted the timetables of their regular flights from their home airports to connection flights, including comfortable waiting times. He explained that the price gaps between the direct flights and split flights have widened. "The price gaps vary between 20% and 40%, causing a substantial increase in demand among the private customers in general, and business class passengers in particular, for flights through a third destination, mainly for flights to the US, and in recent years also for destinations in the Far East, such as Thailand, Hong Kong, China, India, and Japan."
Azoulay's statements are supported by the entry of Far Eastern airlines into Israel. Japanese airline All Nippon Airways is offering Israeli passengers flights to Japan via destinations in Europe, and the entry of Cathay Pacific and Air India is imminent.
"There will always be more demand for direct flights than for connection flights," says Ophir Tours Haifa branch manager Arieh Pollack, who specializes in business customers. "Business customers, for whom the expense is not coming out of their pockets, have destinations they always fly to directly in order to save time. At the same time, we're now seeing more and more instructions from companies seeking to find a more worthwhile route, and in many cases, they mean a connection flight.
"The gaps can be wide. For example, a direct flight to San Francisco with United Airlines in tourist class costs $1,800, while a flight with Iberia with British Airways via Europe and a two-hour stopover will cost less than $1,000.
"Another example is a flight to Bangkok. A direct flight costs $1,300, while a fight through Tashkent costs $680. The ratio between prices is also the same when you look at business class tickets and flexible tickets (that can be canceled or changed, M.R.-C.)."
Waiting time is a factor
Talma Travel VP marketing Doron Hadad brings up another point for business passengers. "Most business trips are usually for short times in the middle of the week. These flights facilitate maximum flexibility in cancelations and changes, so in some cases, direct flights on these terms are likely to be even more expensive. Some businessmen prefer looking for a connection flight, if only in order to preserve the flexible conditions for the ticket. For example, a direct flight in business class to Mumbai costs $2,400, compared with $1,600 on a connection flight with Swiss Airlines," he says.
Mona Tours marketing manager Mira Batish disagrees, however. "The price gap for connection flights is not always worthwhile when you take into account the waiting time, especially if a short business trip is involved, and especially for European destinations," she declares.
The rules change for relatively close destination, as Smartair CEO Erez Bousso explains: "Given the entry into Israel of many low-cost airlines and the intensive competition in the industry, it doesn't always pay to fly via an interim destination on short flights to Europe. For flights to remote destinations, you can find flights for which a stopover saves NIS 1,000 and more per passenger."
The entry of low-cost airlines, headed by easyJet, the second largest foreign airline in Israel, has changed the rules of the game. On flights to London, both easyJet and British airline Monarch are offering flights starting at $350, while a connection flight costs $400, and a direct flight with British Airways or El Al starts at $700 (according to a check of the Alice Flights website in late November). When considering low-cost flights, keep in mind the important principle that the cheap prices depend on the day, and are relevant for reservations made well in advance. Also keep in mind that low-cost airlines charge extra for refreshments and choosing your seat.
There are dozens of stopover possibilities for each destination, but it is important to consider the waiting time at the airport before the connection flight. In some cases, the cheapest flights include 8-10 hours of waiting. Airlines, however, are striving to optimally streamline their timetables to reduce the time spent waiting to 1-3 hours. It is also worthwhile considering in advance the distance between the terminal you land at and the one the connection flight takes off from, especially when a short waiting time at large airports like Frankfurt is involved.
The minimum connection time (MCT) varies between airports and flight destinations, from a 30-minute wait on connection flights within the US, for example, to two hours at large international airports.
One-way stopover
The Explorer price comparison website displays many possible flight routes, plus the option of a "one-way stopover" - a direct flight in one direction and a connection flight in the other direction, usually on the return flight.
This option also saves money. For example, a direct flight to New York on United Airlines in November costs over $1,000. If the return flight is split, for example via Brussels with a 90-minute wait, the price drops to $800. In this case, the price of a connection flight in both directions starts at $600 with a reasonable wait (up to two hours) via Brussels or Zurich, for example.
Daring passengers with plenty of time can choose a route with two stopovers in each direction, thereby saving more money. However, a check we conducted indicated that this was not a major saving (usually less than $50).
Another option offered by the website is a route combining not only several airlines, but also a return flight from a different airport. Here the idea is that not only do you get to visit a destination you had not planned on visiting, but the search engine locates the best deal for example, a combination of a flight to London and a return flight from Berlin costs only $180.
Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2016
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