Foreign airlines’ return seen moderating fares from Israel

After a long period in which many international airlines avoided Israel because of the war, several are due to resume operations at Ben Gurion Airport in the coming month. Among them are Wizz Air, Cyprus Airways, Air India, United Airlines, ITA Airways, Brussels Airlines, and EasyJet. More are expected to be flying to Israel again in April, and in early May, Delta Air Lines is due to join them.

Meanwhile, foreign airlines that have already resumed flights to Israel are increasing flight frequency, among them Air France, Ethiopian, Flydubai, and Lufthansa. Competition on routes will grow, and Israelis hope that this will bring down the level of fares, which is currently high. Nevertheless, this still does not mean a regular summer for travelers: airlines are returning hesitatingly, and in lower volume than in previous years.

Local demand for flights is rising as the Passover holiday approaches, but it is still far below where it was before the outbreak of war in October last year, while incoming tourism, apart from Jewish markets, is at a low, which will affect schedules in the coming travel season.

Arkia CEO Oz Berelowitz says, “For the near term, until July, flights to Turkey and Morocco, flights from Terminal 1, and last minute fares, have all been cancelled, and there is a significant drop in the supply of low-cost flights and in the endless range of destinations that there was in the past.” At the same time, Berelowitz describes record demand for nearby destinations such as Athens, Batumi, Montenegro, Tbilisi, Bucharest, Rome, and Dubai.

As for the longer term, Berelowitz believes that more and more foreign airlines will return to Ben Gurion, but not in the same volume as last year. “War creates different patterns in consumers’ feelings about purchases. Uncertainty and fears about the future make people defer buying until the last minute. The decision is on the spur of the moment, and the vacation is very short.

“From an average of 4.5 nights in February 2023, we are down to an average of 3.5 nights in February 2024. On the other hand, we are a crowded, isolated country, the urge to get out and refresh oneself is growing, and so numbers will rise from week to week. Prices will be higher than last year. Passover and Eid al-Fitr coincide, Turkey is off the map, and there is only a small number of foreign airlines at Ben Gurion.”

Tali Noy, VP Sales and Marketing at travel agency ISSTA, says, “Among nearby destinations we are seeing Athens, Budapest, and Amsterdam starring. Up to now, the prevailing trend has been bookings for short-distance travel in February and March.

“The summer is also starting to fill up, and we expect a substantial rise in fares because of surplus demand and a shortage of supply of flights. We are already seeing ticket prices rising steeply, and this can be expected to apply to hotels as well, because demand outside of Israel is high for the coming summer.”

Noy does also expect a rise in demand for more distant destinations, with booking numbers growing for New York and Thailand.

At present, El Al is the only airline operating several routes to the US: some 50 flights weekly to New York, Boston, Miami, Los Angeles, and Fort Lauderdale. United Airlines, which is due to resume Israel flights shortly, is only offering a single daily flight to New York.

Industry sources say that the return of foreign airlines to Israel will help to bring down fares, and that even if at this stage they are charging prices that are high even in relation to themselves, they are giving a El Al a fight. In the end, competition will tell, and as it grows, El Al will have to moderate its prices. “The more airlines that return, the more possibilities there will be for connecting flights, which could bring down fares to the US even more,” an aviation industry source said.

Turkey will not be an option for Israelis this summer. The exit of Turkish Airlines from the Israeli aviation market has changed it fundamentally, and since the war began, airports in Greece and Cyprus have started replacing Istanbul as destinations for connecting flights westward, while the UAE is the favored hub for connecting flights to the east.

Published by Globes, Israel business news – en.globes.co.il – on February 29, 2024.

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