The government currently pays half of El Al's security costs, which total about $50 million annually. Such a change, if accepted, would bring about increased competition
Sources at the Ministry of Transport revealed last week that a draft proposal was being prepared offering for the government to bear El Al's security costs, while the carrier, in exchange, will agree to give up its agreement with the state, to enable other local & foreign airlines to operate regular routes alongside those operated by El Al. The proposal will be submitted by the end of June of early July, the latest.
In a statement issued recently the Transport Ministry noted that the government currently pays half of El Al's security costs, which total about $50 million annually. If the proposal is accepted, the state's bill will double.
However, in exchange for the full security subsidy, El Al would accept several amendments to the agreement signed between El Al and the state on the eve of the company's privatization. The agreement provides for exclusivity to the carrier on it's main air routes as long as the annual number of passengers traveling through Ben-Gurion International Airport is less than 10.7 million.
Such a change, if accepted, would bring about increased competition as well as introduction of additional airlines on the routes to and from Israel.
