American Airlines: Israel flights canceled for financial reasons
Citing $20m loss, carrier rejects Israeli media claim that Tel Aviv-Philadelphia route was nixed for political reasons
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American Airlines is canceling its lone route to Israel solely because it was losing money on it, the airline told JTA, saying it had never made it out of the red.
“Over the last year, the route lost more than $20 million,” Casey Norton, the airline’s director of corporate communications, told JTA in an email about the Philadelphia-Tel Aviv flight. “In fact, the route has not made an annual profit since it was started in 2009.
“Some international routes require an investment of resources until they stabilize and begin to demonstrate growth, but the revenue demand for our flights to Tel Aviv could never overcome the substantial costs.”
American announced late last week that it was canceling the route, reportedly without informing Israeli officials in advance.
Philadelphia Mayor Michael Nutter called on the airline to reverse its decision, in part because Nutter has been working to develop economic ties between the city and Israeli companies.
On Sunday, the Israeli business journal TheMarker reported the decision to cancel the Philadelphia-Tel Aviv route may have been driven by political considerations.
The report cited industry insiders who said the route was profitable and the airline was trying to bolster its ties with its Arab counterparts. American Airlines is part of the OneWorld alliance of carriers, which means it shares flights and other services with Arab carriers such as Royal Jordanian and Qatar Airways.
According to a report in Ynet last week, the last American Airlines flight to Israel is scheduled for January 4, from Philadelphia to Tel Aviv, and the return flight, scheduled for January 5, will by the company’s last from the country.
Customers who reserved spaces or purchased tickets for flights after January 5 were contacted by the company, which offered to reimburse them or find alternative solutions.
All 19 American Airlines employees based in Israel are expected to lose their jobs after the company ends operations in the country.
Since merging with US Airways last year, American Airlines had operated Tel Aviv-Philadelphia flights on a daily basis. For the five previous years, daily Tel Aviv-Philadelphia flights were carried out by US Airways.
About 95,000 passengers had flown on American Airlines’ Philadelphia-Tel Aviv flights since the beginning of 2015, according to the report.
Israel has not officially commented on the cancellation of the route.
The Times of Israel Community.