El Al to hold back seats for tech businesspeople

In the coming weeks, El Al Israel Airlines Ltd (level:Ellal) plans to reserve 15 seats on each flight to London (Heathrow), Paris and New York for technology professionals traveling on business. Travel agents will be informed next week of the new scheme designed to provide a solution for business and senior technology executives who need to travel to these destinations. The plan is being implemented after the Ministries of Transport, Economy and Industry approached the airline about the need to adapt its services to technology entrepreneurs.

As part of the plan, El Al will reserve back seats on each economy class flight, which will be available for purchase up to 9 days before departure. If the seats are not sold to technology entrepreneurs during this time period, they will be opened for sale to the general public. The airline also promises that there will be no overbooking due to the need to reserve seats for technology workers. On the one hand, industry sources believe that this will make it difficult for El Al to manage flights and force it to monitor every flight, and on the other hand, they say that the move makes great sense. Under the plan, technology companies that are members of El Al’s business division can book flights.

Lack of flights between Israel and the United States

For more than a year, US airlines have not operated regular flights to Israel, and El Al remains the only airline flying directly between Israel and North America. American airlines have operated intermittently since the outbreak of the war, freezing their operations and then resuming their flights, but since the escalation in the north in August, they have frozen their operations again. Delta has extended its cancellations until March 2025, while American Airlines and United Airlines have not yet announced a date for resuming their flights to Israel.

The shortage of seats on flights to the United States is most acute. Although tourists do not come to Israel, the need to travel to North America still exists for a variety of purposes. The world’s second-largest Jewish community lives there (after Israel), the technology sector and other industries have extensive business connections there, and they need access to destinations in North America. The tech industry also relies on the United States as a source of income: two-thirds of the capital it raised last quarter came from outside Israel, especially from the United States.

In the third quarter of 2024, El Al’s market share of flights to North America reached more than 86%, compared to 35.1% in the corresponding quarter of 2023. Over the past year, the Israeli airline admitted that it was having difficulty meeting Demand for many destinations. Including the United States. According to market estimates, in order to meet the huge demand for North America alone, about 16 flights need to be added weekly.

Despite the Department of Transportation’s attempts to bring back US carriers, El Al is expected to remain the only airline flying directly to the United States, at least in the short term. Accordingly, El Al prices will continue to be determined according to the manner in which they are used when demand increases, the number of seats is reduced, and prices rise.

Airline ticket prices are not expected to change with the introduction of reserved seats for technology companies. The maximum prices set by El Al for the war period for economy class flights will remain. Maximum return fares set for plan destinations are $1,515 to New York, $767 to London, and $699 to Paris through the end of February.

El Al confirms that this is a three-month plan, depending on the situation, and the work of the plan will be reviewed throughout the period. “El Al is making efforts to help the Israeli economy and high-tech companies and will continue to do everything in its power,” the company said.

The tech protest movement wanted to charter planes

In recent months, technology executives have been forced to accept more expensive flights with layovers. All this prompted the DemocraTech protest movement to launch an initiative called “Tech Air” to operate flights between Israel and the United States from January using planes leased from a European company that will be operated under an Israeli corporate code. The goal was to open the route to the general public, with three weekly direct flights to be marketed by travel agents, starting January 5, at a fixed price of $1,350 for economy class, $2,600 for premium class, and $5,400 for business class. This is through a wet lease on a Boeing 777. The fixed pricing model provides a guarantee for last-minute ticket bookings, but is not necessarily a real deal compared to El Al prices when booking a ticket in advance.

When details of the trips were published, DemocraTech indicated that the timeline was not final, and that the company would only launch when it knew that at least 35% of technology companies had committed to participating and purchasing tickets for the period of activity. Meanwhile, DemocraTech is promoting the leasing of the aircraft, and according to industry sources, contacts have been made with Portuguese airline euroAtlantic Airways to lease the Boeing 777. Raul Largo, EuroAtlantic’s chief commercial officer, told ch-aviation that the private airline It received a request from several intermediaries to operate flights between Tel Aviv and New York, but added that Euroatlantic was not in direct contact with the end customer and did not know whether that was the case. no. It was DemocraTech.

Travel agents Globes spoke to report that there are currently no indications that Tech-Air will actually take off as planned. Flight planning is a process that takes place months in advance, in order to coordinate airports, landing rights, aircraft use, and ticket marketing. Adding a flight less than a month before the departure date is very rare from an operational and marketing standpoint.

Published by Globes, Israel Business News – en.globes.co.il – on December 15, 2024

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