Air travel costs soar amid war, as foreign carriers sluggishly renew Israel flights
Industry experts urge government to incentivize airlines to resume services and flight frequencies as part of a postwar recovery plan for the tourism industry
Sharon Wrobel is a tech reporter for The Times of Israel.
With Passover and the summer fast approaching, air travel prices are skyrocketing, as foreign carriers struggle to gradually resume service to Israel despite the ongoing fighting with Hamas in Gaza.
When war broke out in the aftermath of the terror group’s October 7 onslaught in southern Israel, almost all major international airlines suspended flights to Tel Aviv.
But since the start of the year, with rocket attacks from Gaza into Israel having largely abated, a few foreign carriers have resumed their Israel routes on a reduced schedule, while others have delayed or indicated that they plan begin flights to Ben-Gurion International Airport in the coming weeks.
Plane ticket prices to and from Israel have more than doubled because of the lack of supply, little competition, a higher war insurance premium, and an uptick in demand.
Aviation industry representatives and tour operators are calling on the Israeli government to draw up a roadmap to incentivize airlines to resume services and increase flight frequencies as part of a strategic plan to help jumpstart a postwar recovery of the tourism industry and the economy as a whole.
“Taking into account that aviation plays a crucial role in the economic development of a country and that it will play a crucial role in the recovery of the Israeli economy after the war, one would expect the Israeli government to proactively support or encourage more and more airlines to fly into Israel and support further the activity of the Israeli carriers as well,” Kobi Zussman, Israel country manager of the International Air Transport Association (IATA), told The Times of Israel.
“Of course, as long as we are in a state of war, getting back to normal operations is difficult, but we have to think of the day after the war ends and how Israel wants to bring back tourists.”
The war erupted on October 7, when Hamas sent thousands of terrorists from Gaza into southern Israel, where they carried out an unprecedented rampage, killing some 1,200 people, mostly civilians, and kidnapping 253. In response, Israel called up hundreds of thousands of reservists to join the fighting and evacuated large swaths of the Gaza and Lebanon border area, with businesses shutting and people staying home under a rain of rockets as the country shifted to a war footing.
The war in Gaza took a heavy toll on the economy, which shrank an annual 19.4 percent in the last three months of 2023 from the previous quarter, as consumer spending, trade and investment dropped, and tourism came to a halt. In all, the economy expanded only 2% in 2023 after growing at a fast pace of 6.5% in 2022.
As international carriers suspended most services to Israel in the days following the October 7 onslaught, passenger traffic plunged, leading to a 78% drop in November and a 71% dive in December, according to data by the Israel Aviation Authority (IAA).
To keep the skies open, Israel approved $6 billion in insurance guarantees to Israeli airlines, enabling flag carrier El Al Airlines, as well as Arkia and Israir, to continue repatriating Israelis from abroad and help bring reserve soldiers home.
Out of more than 150 foreign carriers that were flying to Israel before the outbreak of the war, only about 50 have resumed some of their operations into Israel this year.
“We went down from about 650-700 inbound and outbound flights a day before the war to 150-250 a day,” said Zussman.
Among European carriers, Germany’s Lufthansa and its affiliates Austrian Airlines and Swiss brought back some flights to Tel Aviv at a reduced schedule in January, followed by Air France, while British Airways announced that it will restart some services from April 1.
Among US airlines, United Airlines started flying to Tel Aviv from New York at the beginning of March. The carrier said it will assess the resumption of services from San Francisco, Washington and Chicago in the fall. Delta Air Lines announced in March that it plans to revive daily flights to Tel Aviv from New York in June.
“Delta has been delaying resumption again and again and until it happens I don’t believe it,” said Mark Feldman CEO of Ziontours Jerusalem. “Most airlines are not coming back with enough routes, in particular to North America and other long-haul destinations.”
“Flights are booked 80% by Israelis — historically, it’s been 55% — so everything is skewed and that is why ticket prices are beyond any logic,” Feldman said.
Among low-cost carriers, Hungarian airline Wizz Air resumed flights on selected routes to and from Tel Aviv this month and UK’s EasyJet is scheduled to restart services to and from Israel on March 25.
Meanwhile, Irish low-cost carrier Ryanair re-suspended flights to and from Tel Aviv, as of February 27, a month after it resumed its operations to Israel with a reduced schedule. Ryanair said that the closure of Terminal 1, which is mainly used by charter and budget airlines as well as for domestic air traffic, had forced it to use Terminal 3, which charges higher fees.
“This is not COVID, the rest of the world is flying,” said Feldman. “It’s not that Ryanair is parking its jets and they are sitting in some dusty field — they can use them for other destinations to make money, so why should they come to Israel?”
Among foreign carriers that have suspended flights to Israel until further notice are Cathay Pacific, Air Canada, Virgin Airlines, Turkish Airlines and Pegasus Airlines.
“The government needs to step in with a strategy to motivate airlines to come to Israel and keep routes open, especially for those airlines that are not flying, and give them some safety net for the first month or two — help them start and it will take off from there,” said Yossi Fatael, director general of the Israel Inbound Tour Operators Association.
“We need to incentivize the arrival of airlines, as our neighbors Jordan and Egypt, which were also affected by the war, are doing, and assist with, for example, the insurance of tourists and foreign airlines,” demanded Fatael.
Look to the neighbors
The war in Gaza, which is in its sixth month, has had a ripple effect on travel and tourism to other countries in the Middle East, especially Egypt and Jordan, where flight bookings have dropped and tour operators have reported cancellations.
In response, Egypt is providing incentives to prop up its tourism industry and lure airlines to fly to select destinations, including Sharm el-Sheikh, and reimburse tour operator marketing programs. In 2023, tourism contributed 26% to Lebanon’s current account receipts, according to a report by S&P Global. For Jordan and Egypt, the figure was 21% and 12%, respectively, and for Israel, 3%.
In 2023, Israel saw 3.01 million tourist entries, injecting NIS 17.7 billion ($4.8 billion) into the economy.
Both Zussman and Fatael suggested that Israel could give some incentives to airlines in the form of reduced airport charges and assistance with high insurance premiums.
“This is something that is not out of the ordinary in the aviation world and which could help stimulate economic activity,” said Zussman. “This is something we would have expected to see in Israel, but we don’t see any such intention or even desire.”
Zussman cited Greece as an example of a country offering international carriers discounts on airport charges to fly to Greek islands during winter or off-peak months to boost passenger traffic.
A spokesperson for the IAA told The Times of Israel that airport fees in Israel are already among the lowest in the world and that foreign carriers are gradually coming back to the country, but tourists are staying away due to the ongoing war.
The Transportation Ministry said it is evaluating the reopening of the low-cost Terminal 1 in the coming weeks. Meanwhile, the IAA is reluctant to reopen the terminal, in the face of low passenger traffic and because of personnel shortages, partly due to the callup of reserve soldiers during the fighting.
Zussman cautioned that as foreign carriers reduce or halt their services to Israel they will allocate their planes to other, more attractive destinations. Therefore, he urged, the government needs to act now with incentives and support to secure a significant return of foreign carriers in the postwar period.
“The moment that airlines are not able to fly to a certain destination, they find equally advantageous destinations, and it takes months to turn the clock backward,” said Zussman. “To encourage economic activity and see tourists coming back to Israel, the government needs to devise a plan of encouraging more and more airlines to operate routes to Tel Aviv.”
