The step is seen as a further attempt to open Israel's skies and lower ticket prices for consumers. Total estimated costs are $80 million per year
Minister of Transport Shaul Mofaz said last week that within the next month he will apply for government's approval to finance 80% of the security expenses of local airline companies. The step is seen as a further attempt to open Israel's skies and lower ticket prices for consumers.
Mofaz said in a statement that there was no doubt that the move represents a true revolution that will affect the Israeli traveler, the tourism industry and the entire Israeli economy. Mofaz added that "Due to Israel's unique security constraints, the local airline companies need to carry the burden of unusual expenditure which are not familiar in the International aviation industry,". He added "These expenses constitute a heavy weight on the Israeli companies and hurt their ability to compete with the foreign aviation companies. Opening the sky for more Israeli and foreign airline companies without implementing equal ground conditions and fair basic rules for the Israeli carriers, would interfere with their chances to compete within the international market."
It is understood that the proposal calls for the state to finance 80% of Israeli airlines' security costs about - $80 million a year - instead of the current 50%.
In exchange, El Al Israel Airlines Ltd. will forego its exclusivity on certain aviation routes.
If the cabinet approves the proposal, it will open Israel's skies to competition for Arkia Airlines Ltd. and Israir Airlines and Tourism Ltd. as well. El Al is currently the sole designated carrier on several routes under its privatization agreement with the government.
El Al responded: "The decision does not solve the problem because the recommendations by the public committee at the Transportation Ministry on opening the skies included a gradual opening, dependent on fully covering the security costs for Israeli airlines. The State of Israel must grant Israeli airlines support to allow them to compete on equal terms."
