Foreign airlines flocking back to Israel following ceasefire

In just three weeks, 14 leading airlines have announced the resumption of their Israel operations with the addition of hundreds of weekly flights at Ben Gurion airport. The announcements of renewal of services began with low-cost carriers Wizz Air and Ryanair, and subsequently easyJet, which announced the addition of flights to Europe. Next in line was the Lufthansa Group, which has made it easier to fly between Israel and major European cities such as Amsterdam, Frankfurt, Munich and Vienna, after access to them was limited.

Other major European airlines such as British Airways and Air France quickly followed, and even Delta Airlines, which, due to being an American long-haul company, we expected to return last – all announced that they would return. Air India, which was the last of the Asian airlines to join the latest wave of cancellations, also announced that it would resume operations in March.

The return to Israel of all these airlines opens a window of opportunity to purchase tickets at more attractive prices. The reason is that companies that return to the market tend to market the first seats on each flight at low prices, in accordance with the pricing algorithms used in the aviation industry, with the more seats on the plane are sold, the higher the fare. This is why airlines that have gained trust during the war are pricing their tickets higher, because the supply of seats remaining on flights is lower since Israelis have been preferring them over carriers that were quicker to cancel; flights to Israel when the security situation escalated.

Fares do not fall evenly

The most dramatic news for Israeli passengers and the fares they pay is probably the return of Air India. Since it halted services completely in August, there have been no direct flights from Tel Aviv to India, with the need to fly via the UAE or Europe.

Return fares now start at $428, and Air India’s operations will also increase in the supply of flights to East Asia, with Delhi airport being a significant hub for connecting flights. It will compete with the UAE airlines, which provide Israelis with access to Dubai and Abu Dhabi as hubs.

Low-cost airlines are also returning with attractive fares, and you can find direct flight return tickets to various destinations in Europe at particularly affordable prices, some for less than $200.

Other European airlines, such as Air France, have higher fares. For example, the starting price of a round-trip flight to Paris is $500 in February, and on British Airways a return fare to London starts at $450, when it returns in April.

On the other hand, flights between Israel and the US have not yet seen a drop in fares. In recent weeks, two airlines have announced that they will operate routes to North America. The first is Arkia, which will operate three weekly flights using chartered planes to New York from February, for which return tickets can be purchased from $1,198. The second company that will recommence Tel Aviv-New York flights in April is Delta, which is selling return tickets starting at $1,040. For both companies, these are starting prices, and the more popular the flight date, the higher the fares, sometimes over $2,000 for a round-trip ticket in economy class. The reason is that there is still a shortage of between 12-15 weekly flights to destinations in the US, according to industry sources.

Security concerns trump all else

Many of the airlines that have officially announced their return to Israel in recent weeks had publicly demanded an amendment to the Air Services Law, , in order to resume their operations, which would suspend some of the consumer rights of passengers in the event of flight cancellations, including financial compensation.

Over the past few months, the airlines have been working with the Knesset’s Economics Committee, and have succeeded in reaching agreement on an amendment that would reduce their exposure to expenses for flight cancellations, especially during times of emergency such as war or other security incidents. The amendment has not been finally passed by the Knesset, but this has not stopped foreign companies that supported the amendment from resuming Israel operations.

Despite the airlines’ efforts to obtain improved conditions from the state, it seems that the factor that ultimately tips the scale is significant progress towards a ceasefire, which allows air crews to feel safe and marks the end of the volatile developments to which the carriers are so sensitive.

It now seems that the amendment is closer than ever to being enacted. On Sunday, the cabinet approved what Economics Committee chairman MK David Bitan, defined as a condition for passing the amendment to the law – the state will participate in some of the costs of airlines operating flights to North America, in the event that the operating model is expected to be unprofitable, among other things due to operational constraints that will lead to flight cancellations.

According to the amendment, the state will compensate Israeli airlines that operate at least two additional weekly flights to the US and Canada. The government will allocate up to NIS 15 million from the state budget to subsidize airlines that take part in this initiative, to strengthen competition against El Al and US airlines. But given Delta’s official return in April and the possibility that United Airlines will return as early as February, questions arise on the feasibility of the move for Israeli airlines. In addition to compensating Israeli airlines that will operate charter flights to the US, such as those that Arkia will soon operate and will be eligible for state aid, the Ministry of Finance has also worked to reopen Terminal 1 from April 1 to appease the low-cost airlines led by Ryanair.

Wizz Air returned even before, shortly after the ceasefire agreement with Hezbollah came into effect, long before Terminal 1 was due to reopen. With the significant progress in the ceasefire in Gaza and the halt in rocket launches by the Houthi rebels towards Israel, low-cost carriers Ryanair and easyJet announced that they would return after the reopening of the terminal in April and June respectively.

The crisis is not yet over, especially on US routes There are still airlines that have not yet announced their return to Israel. For example, United Airlines, which according to industry estimates is expected to return earlier than expected, although there has been no change since it declared that it would not fly to Israel until further notice.

Air Canada and American Airlines, like United, have not stipulated any date on which they will resume flights to Israel. These are large companies that operate long-haul flights, which makes it difficult for them to have operational flexibility, compared with European airlines. Airlines including KLM and Iberia are scheduled to return to Israel within the next two months, but they have not yet officially announced a date.

Turkish Airlines and Turkish carrier Pegasus, which operated in Israel on a major scale before the war, have also not returned, and are now considering their next step, under threat that the slots reserved for them at Ben Gurion airport will be given to other airlines. However, these airlines are subject to Turkish President Recep Tayyip Erdogan’s policies, and the crisis in relations between Israel and Turkey since the outbreak of the war.

Published by Globes, Israel business news – en.globes.co.il – on January 27, 2025.

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