El Al has recorded quarter after quarter of record profits as most foreign airlines stay away from Israel.
All airlines have pricing algorithms that drive prices up when demand goes up. Is El Al gouging? I don’t think that’s the case, but obviously, it can charge much more when it has such a dominant market position.
North American carriers Air Canada, American, Delta, and United have remained on the sidelines. Yes, they would like to fly to Israel and take their share of the profits. However, unionized crews have refused to fly to a war zone, let alone overnight there, insuring planes can be difficult, and frequent cancellations have wreaked havoc with even planning a return date to Israel. Airlines are canceling Israel flights further out and suspending service indefinitely so they don’t tie up aircraft that could be better utilized on new routes.
Tech leaders in Israel are unhappy about the cost of El Al flights as well as the lack of seat availability and are looking for other options.
Of course, that demand of Israel’s flag carrier is a catch-22. If El Al would lower the cost of flights below what the pricing algorithms calculate to be optimal for the market to bear, it would create artificial scarcity and make finding available seats even more difficult than it is today. That would lead to even more complaints about seat availability, which is why El Al finds itself in a no-win situation as it reports record profits. Sure, it could technically lower prices below the market rate, but doing so would create an artificial scarcity of available seats which would be trading one problem for another.
Israel’s Channel 12 reports that with backing from Israel’s tech sector, Arkia and Israir have received government approval to operate 10 weekly flights between the US and Israel.
Israir last operated between the US and Israel in 2008.
Arkia had planned to purchase, and even configured 2 Airbus A330-900neos in Toulouse to operate flights between the US and Israel, but that never came to fruition.
As it stands now, neither airline has any widebody planes or crew that can fly a widebody, so they would have to wet lease them from an operator abroad, with crew from that operator.
I am deeply skeptical about whether they can pull that off.
El Al has been able to operate consistently because their crew is based in Israel.
Finding a European crew willing to fly to Israel and stay overnight in Israel as will be needed to operate nonstop flights between the US and Israel, will be very difficult if not impossible. And even if it can be done, the crew will balk at flying to Israel when tensions rise, which is why almost no European airlines are currently flying to Israel.
Arkia and Israir have struggled operationally this year in large part due to wet-leased aircraft and operators that have balked at times about operating to Israel, even when their crews aren’t overnighting in Israel. That will be exacerbated if they try replicating that with long-haul routes on widebody planes with overnighting in Israel.
In order to operate, Arkia and Israir are demanding that Israel pause its Aviation Services law which requires airlines to compensate passengers for delays and cancelations. That shows their confidence in being able to operate effectively in the current environment.
And with El Al selling their flights between the US and Israel at nearly full flight loads, it will be a challenge to accommodate stranded passengers or for passengers to find another way back in case of delays or cancelations.
Arkia and Israir would also have to ramp up customer service lines to deal with that kind of influx. And if you think El Al’s website is stuck in the past, just try using the Arkia or Israir websites…
The real solution to the capacity issues will be the return of foreign carriers and especially the North American carriers, but that seems unlikely to happen until the multifront war concludes.
Do you think the Arkia or Israir flights will come to fruition? Will you book travel on them?
