Israir to operate regular flights to NY

Tourism Minister Abraham Hirchson announces Israir will receive „designated carrier” status for 24 months, during which the decision’s ramifications will be evaluated. Israir welcomes the decision, prepares to operate daily flights to New York; El Al officials: ‘this is a bizarre and an improper decision Tourism Minister Abraham Hirchson announced Monday that Israeli airline Israir will be awarded „designated carrier” status for New York – Tel Aviv flights. The decision allows the company to schedule regular flights, rather than rely on charter flights as it has done thus far. „I think there is an explicit and essential public interest in adding a designated carrier to compete with El Al,” said Hirschson. „Under the current conditions there is an excess in demand, coupled with a lack of seats. As a result, considerable damage has been done both to the travelers and to the economy. „I have received legal advice to suggest appointing an additional designated that will lead to economic benefits and competition without damaging El Al’s economic fortitude, its future plans or the stabilization of the Israeli aviation sector,” he said. Airlines wishing to operate regular flights to and from Israel require government approval, but to date, only El Al has a license to do so. For the next two years, Israir will be permitted to operate regular flights, during which time the ramifications of Israir’s entry into the market will be examined, and at the end of this period it will be decided whether to extend its license. El Al furious Israir officials say they are preparing to operate a daily Tel Aviv – New York flight, and estimate the addition will lead to a 10 percent decrease in airfares. El Al is furious over the decision, and some predict the airline will appeal to the Supreme Court to overturn the decision. Israir began its attempts to gain approval for scheduled flights in September 2004, and the application was transferred after several months from the jurisdiction of the Transportation Ministry to the Tourism Ministry, to avoid a possible conflict of interests with the wife of Transportation Minister Meir Sheetrit working in the travel industry. „With the help of the professional staff, we held an extensive hearing with the explicit purpose of allowing those relevant to the decision to present their positions before me,” said the Minister of Tourism. „Meetings were held with El Al representatives, stockholders and workers’ union, as well as representatives and workers of Israir, Israel’s hotels association, the Governor of the Bank of Israel, director of procurement at the Ministry of Defense and others.” Hirchson also indicated that when he met with Arkia employees, they said they would apply for a designated carrier license, but not for another year-and-a-half license. „That is why their request is not being considered at the present time,” he said. Israir: Small first step Israir praised the decision, saying it is „a first small step towards implementing competition in the skies of Israel, and minister Hirchson’s decision adds a significant contribution to the development of the Israeli economy, and to the advancement of a ‘blue-and-white’ industry. „Israir has been preparing for months to operate daily flights on this route, at a capacity of 100,000 seats per year. During the last several weeks, Israir has accelerated employee recruitment, as part of its preparations for starting operations.” Israir officials say the conversion of its flights from charter to commercial „will lead to a significant upgrade in the quality of the product, service and the competition for Israeli clients and to” El Al: Blatant breach of previous commitments Chairman of the El Al Board of Governors, Israel Borovich, criticized the decision, saying „it constitutes a blatant breach of the explicit commitments the government gave El Al, its employees and stockholders, on the eve of its privatization in 2003. „This decision, just a year after control of El Al was taken from the government – and on the eve of elections – is bizarre and improper,” he said. The El Al chairman added that the company „is in favor of competition, and supports an open skies policy while meeting one’s commitments. El Al will use all legal means at its disposal to force the state to fully uphold its commitments.” Arkia: Unreasonable discrimination A spokesman for Israel’s third airline, Arkia, said that Hirchson’s refusal to award the company designated carrier status „surprised the company because it is an explicitly discriminating and unreasonable decision, which Arkia does not approve of whatsoever.” The Israel Hoteliers Association responded by saying, „this removes one of the most significant obstacles in the way of increased tourist traffic to Israel. It is imperative for the growth of the economy in general, and tourism in particular. „The minister’s decision to cancel this monopoly will benefit the economy, and therefore joins the general trend of privatization, the encouragement of competition and the prevention of monopolies, as is customary in other sectors of the economy.”
BPI-info