Israel, EU Agree Open-Skies Deal

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Published: March 23, 2012

Israel and the European Union on Thursday concluded an aviation agreement that is aimed at reducing air fares to and from the Jewish state, the European Union said.

The deal is set to be phased in gradually by 2017 and will allow all EU airlines to fly direct to Israel and Israeli carriers will be able to operate flights to airports throughout the EU, the statement said.

“The… agreement… is very important for further strengthening the overall economic, trade and tourism relations between Israel and the EU,” said Siim Kallas, vice-president of the European Commission and commissioner for transport.

The statement added that Israel would implement EU regulatory requirements and standards. The agreement will replace a series of aviation agreements Israel had signed with individual EU member states.

“Israel is a key partner for the EU and the agreement will strengthen the aviation links between the two partners and establish a high level of regulatory convergence,” Kallas said.

Israeli airline workers last month said they feared the agreement could harm earnings of Israeli carriers, calling a work dispute that led Transportation Minister Yisrael Katz to temporarily delay the deal.

Flag carrier El Al Israel Airlines lost USD$ 7.8 million in the fourth quarter, compared with a profit of USD$ 16.3 million in the last three months of 2010 due to higher jet fuel prices and increased competition from foreign airlines.

The Israeli carrier’s market share from Tel Aviv’s Ben Gurion Airport fell to 33.9 percent at the end of 2011 from 37.1 percent in 2010.

Chief executive Elyezer Shkedy said El Al faced continued rise in competition from giant partnerships and foreign companies which has more than doubled in the past five years. The airline implemented cost-cutting measures last year, including the elimination of 200 jobs in the last quarter.

The EU-Israel air transport market counted 6.75 million passengers in 2010, an increase of 13.4 percent compared with 2009.

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