Saturday, April 20, 2013
Israeli government poised to approve Open Skies agreement: Israel airlines gear for strike
Meanwhile, the three major airline carriers moved up a proportion of their Sunday flights to 4 am, in order to dodge the strike.
The Transportation and Finance ministries said that the agreement is expected to significantly boost tourism to Israel and to lower the cost of flights from Israel to Europe. However, it is also likely to take a toll on the revenues of Israel's three major airlines.
To prevent crippling damage to the domestic companies, the government ruled that the agreement be implemented gradually over the course of five years, in order to give the carriers time to adjust to new competition from foreign companies. The government is also expected to increase state participation in the carriers' security bills at a rate of NIS 5 million a year.
However, the promised benefits did little to allay fears among airline unions, who are determined to go ahead with the strike.
Katz, a member of Netanyahu's right-wing Likud party, told Israel Radio a free skies agreement "would significantly lower the prices of airline tickets to Israel, do well by Israeli citizens, and attract many tourists" to the country.
"Such deals contain risks as well as benefits and the companies ought to exploit the opportunity" to compete more vigorously with European airlines which could also open the door to Israeli airlines landing in hundreds more cities, Katz said.
Secret report warns of El Al's collapse
Some of the options for staving off the collapse of the domestic giant include emergency state funding and temporary nationalization of the company, with a view to finding it a powerful private investor.
Secondly, the agreement does not allocate them additional landing slots in overcrowded European airports, while supplying their foreign competitors with landing slots aplenty on Israeli soil. Finally, it does not leave them the option to withdraw from the deal, should they find it financially unfeasible.