Private flights profit from Israel's closed skies

Private jet

With few options for getting in and out of Israel, "Globes" discovers that private flights might be more affordable than you think.

The Covid-19 pandemic and the closure of Israel's skies have seen a jump in the number of private flights. The departures board for private flights from Ben Gurion airport last week included such destinations as Larnaca, Amman, Sharm el-Sheikh, Istanbul, Kiev, Amsterdam, Moscow, Cologne, and Basel. The passengers are not necessarily fantastically rich and in many cases just rank and file citizens, needing to get in and out of Israel, and compelled to pay a fare, which was several times or more higher than a scheduled commercial flight.

Take the case of A, who lives in Cyprus and despaired of finding a commercial flight to take him back home. He and a group of others needing to urgently reach Cyprus, each paid €1,000 for the private flights between Ben Gurion airport and Larnaca. In February 2021, Israel's Civil Aviation Authority reports that there was a 72% jump in private jets flying to and from Israel: 802 private flights landed in Israel and 1,053 took off.

"People phone me up and ask how much a ticket costs but it doesn't work that way," explains Israel Aircraft Owners and Pilots Association (IOPA) chairman and Aya Airlines owner and CEO Nati Peretz. "When a scheduled airline offers a flight, it is like a bus. When I offer a flight it is like a taxi travelling from A to B. Since the skies were closed at the end of January, there were situations in which there was demand for a private flight from passengers who had succeeded in getting permits from the exemptions committee but did not get approval to fly from the Civil Aviation Authority."

Peretz adds that the price of private flights in Israel had risen even before the Covid pandemic, due to regulations restricting operations by foreign registered planes. "These operations had always been prohibited but they ignored it. In Israel there are roughly 60 foreign registered private planes and only about 10 Israeli planes. This has created a crazy demand, which has influenced prices."

Most of these private flights are to nearby destinations such as Amman and Larnaca, from where passengers can board commercial flights to wherever they need to be. Peretz says, "A flight to Amman takes about 20 minutes and can cost $600 per passenger. It's more than a commercial flight but it's an amount that most people can manage, in order to get out of Israel. What also impacts the price is the cost of ground services at the airport (towing, maintenance and parking and the like), which have almost tripled. Before Covid-19 we paid $800 at Amman airport for maintenance and today that has climbed to $3,000. I don't blame them. If maintenance was once provided for 10 flights, today they operate an entire system for one flight."

Peretz estimates that pricing for one hour of flying is about $3,000 not including fees. He describes the flight experience for the passenger as, "Like a regular flight. You go through passport control, board the plane, which at most has eight passengers. Cabin crew is present throughout the flight and according to the type of aircraft."

Aya Airlines operates 3-4 flights per day, taking off from Ben Gurion airport and Haifa.

Cava Group founder and CEO Sharon Cohen says, "This has been one of the best years for private flights. For many people they have no choice. People receive a permit from the exemptions committee to fly and it's a matter of flying on a private plane or not flying at all because commercial routes to many destinations have been cancelled. We have found ourselves connecting up people needing to reach the same destination and in extreme situations the passengers were wealthy people who previously would have flown in business or first class but have been 'forced' to fly to meetings or on vacation on a private plane. These are customers who will remain with us."

As the skies reopen, can we assume that demand for private flights will fall?

Peretz: "If the commercial airlines can meet demand that will bring down the number of private flights. We know how to work when there isn't Covid. We estimate that there will still be demand for businesspeople wishing to fly to meetings, families that want to go on vacation as a 'capsule' (insulated from the large number of passengers on a regular flight). The aviation and tourism industry has undergone a big rupture and we see that there is large demand for private flights worldwide, which are currently fetching double the fares on their price list. People don't want to fly with people who they don't know. In Israel, we do not see a rise in demand to buy private jets but we do see a rise in demand for people learning to fly."

Cohen: "Over the next year, many of the (landing and takeoff) slots will not be restored to operation. When the skies reopen, the airlines will focus on the main destinations like Paris and London. The map of destinations will not resemble what is was in 2019, when it included many niche destinations. This situation will let private planes fly to such destinations as Ibiza, Palma de Mallorca, Mykonos and Santorini. We believe that wealthy clients will prefer to forgo connection flights and fly privately."

"The convenience of a private flight is reflected in the overall experience, while the seat in business class of a scheduled flight is probably more comfortable. Instead of arriving two hours before a scheduled flight, passengers can arrive 20 minutes before a private flight. Before Covid, we were working in the luxury market but during Covid we have opened up to other customers. We had a family that needed to fly to a wedding in Europe. They broke into their savings account and instead of paying $300-400 per person for a scheduled flight, they paid $3,000 per passenger."

"We have tried to find commercial flights for passengers from the nearest airport, so that we only needed to fly them to that nearby airport. In many instances, we serve as a connection flight. The most popular destination for us has been Cyprus, to which a flight costs $8,000-9000 and Dubai, to which a flight on a small executive jet will cost $38,000. These calculations include a two-way flight, because we have to take into account that the plane would fly empty in one direction. The Dubai flights were for vacations, not necessarily for the really rich, but for people who decided that as part of the experience, they would fly on a private jet. And not only to the UAE, for the Passover holidays and the New Year/Sukkot holidays, we experienced demand for vacations in nearby destinations from families who preferred to fly as a capsule (without other passengers. We even had a few flights to China ($90-120,000) and a flight to Boston, which cost $200,000."

Cava Group, which has been operating since 2015, does not manage a fleet of aircraft. "We are brokers. We work with companies that have fleets in Israel and abroad and connect up passengers looking for flights to the same destination. I can say that flights registered as Israeli encounter more problems, when applying for approval to fly over Arab countries."

Humanitarian flights

Private flights have also been operated by Israel's scheduled carriers. Arkia International CEO Oz Berlowitz says, "When they closed the skies and the foreign airlines weren't allowed to fly, we received a flood of requests to operate private flights, mainly for humanitarian reasons, like funerals. We operated some flights from Larnaca for people who had flown there from such places as the US. Each flight requires approval from the Civil Administration Authority and we encountered quite a few refusals. Most of the private planes in Israel are registered under foreign ownership and so when there was peak demand, every Israeli registered plane was attracting bookings. We even flew five passengers on a passenger plane."

The flights operated by the scheduled carriers included medical flights, some of which were paid for by insurance companies, and there was a flight for a defense industries delegation to an exhibition in India. "We built a department that handled special and private fights mainly to non-standard destinations. The pricing was set according to the hours of the flight and the logistics at the destination. What was critical was how quickly we could respond. There were situations, in which we were contacted at 2pm, and at 5pm the plane took off. The crisis opened up business opportunities for us. This was a negligible activity for us before Covid, which we will keep going after we return to regular operations."

In recent months Israir has operated 140 private flights. Israir CEO Uri Sirkis divides the flights up to ambulance flights, such as flying a woman back to Israel to give birth, or casualties after a car accident, flying sports teams to and from Israel and commercial enterprises. "We added 500 flying hours to our schedule. We flew to places we have never been to before like Turkey."

Asked if he thinks these flights will continue after the skies reopen Sirkis said, "The market will balance out and these operations will decline but ultimately it is a matter of complementary options."

Published by Globes, Israel business news - en.globes.co.il - on March 17, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018