No lower Israel-US airfares on the horizon

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Even if Delta Airlines resumes Israel flights in April 2025 as planned, many of its tickets are more expensive than the equivalent El Al tickets.

El Al Israel Airlines Ltd. (TASE:ELAL) remains the only airline operating direct flights between Israel and North America. In November, 11% of the passengers passing through Ben Gurion airport flew to and from the US on El Al flights.

There seems to be a fading likelihood that El Al will face competition before April on its US routes, thus putting downward pressure on airfares. But even if Delta Airlines resumes Israel flights as planned in April 2025, many of its tickets are more expensive than the equivalent El Al tickets.

Plans by Israeli tech leaders to charter planes and crews for flights to the US have not yet moved forward, while Israir and Arkia look unlikely to launch flights to New York any time soon. Israir has been deterred by the reluctance of the Knesset Economics Committee to approve an amendment to the Aviation Service Law, which would absolve airlines from the need to compensate passengers for canceled flights while the war continues.

Israir had planned to lease planes and offer 15,000 seats on flights to New York but in the wake of the Knesset's foot dragging, CEO Uri Sirkis told "Globes" "The current decision undermines Israir's business plan. It's not completely out of the question (operating flights to the US), but it significantly increases the risks when it comes to extreme events."

To make matters worse few connection flight options are available with Air France, Lufthansa Group and Italian carrier ITA extending the suspension of flights to Israel even after the Israel-Hezbollah ceasefire. ITA announced only yesterday that it is extending flight suspensions to Israel until the end of January 2025.

American Airlines and United Airlines have said they will not be resuming flights to Israel until further notice but Delta Airlines is due to recommence flights to Ben Gurion airport in April 2025. In the airline industry in Israel the concern is growing that flight cancelations will continue to be extended although the entry of Donald Trump into the White House could change the picture.

But even the resumption of flights to Israel by Delta in April does not seem to satisfy demand and bring down fares significantly. "Globes" made a random check of three dates on Delta's website. At the end of April a return ticket from Tel Aviv to New York on Delta costs $1,112 compared with $1,449 on an El Al flight. In early May a return ticket on Delta becomes more expensive - $1,462 compared with $1,364, and in June a return ticket on Delta costs $1,732, while the equivalent return ticket on El Al is $1,424.

Some comfort is that since the ceasefire was signed between Israel and Lebanon, the shekel has strengthened by 5.3% against the US dollar, meaning that the Israeli currency is at its strongest in 10 months against the dollar, translating into savings on airfares for Israeli travelers.

Published by Globes, Israel business news - en.globes.co.il - on December 10, 2024

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