As foreign airlines lay low during war, a new carrier is a boon for grounded Israelis

To launch a new airline amid a raging war as hundreds of rockets rained down across Israel and foreign airlines and tourists shunned the country was a proposition with a dismal chance at success.

But not so for Air Haifa, the country’s first new airline since the 1990s. Defying all odds, the carrier debuted its operations on October 14 starting with flights to Larnaca, Cyprus. Despite its name, Air Haifa launched from Ben Gurion Airport outside of Tel Aviv as intensifying clashes with and incoming missile fire from the Iran-backed terror group Hezbollah forced airport closures in Israel’s north.

Air Haifa co-founder and commercial executive vice president Michael Strassburger said the original idea was to emerge as the first low-cost airline in the north, filling a gap in the market and a longstanding and urgent need for locals.

“Who does such a thing, launching a new airline during war? What’s the logic behind launching an airline amid war? Obviously, all of us would rather launch the airline when there is some normality in Israel,” Strassburger told The Times of Israel. “But on the other hand, the current situation in the Israeli market for local carriers is that demand is higher than capacity.”

“This is why 2023 and 2024 are probably the best years ever for the Israeli aviation industry — so I guess that provides an answer,” he added.

The low-cost carrier not only made headlines in launching its operations during a raging war, but stepped into an opportunity to fill a vacuum for travelers seeking to fly in and out of Israel as most foreign carriers temporarily grounded flights to the country in the aftermath of the October 7, 2023, Hamas terror assault.

Founders of Israeli low-cost airline Air Haifa (from left to right): Lior Yavor, Gonen Usishkin, and Michael Strassburger. (Courtesy)

Left with very few options to travel abroad, and with prices sky-high, passengers looking to fly to the US and other European destinations found new hubs in Larnaca and Athens, from where they could board connecting flights. Air Haifa operates four daily flights between Larnaca and Ben Gurion Airport alongside fellow local carriers El Al, Arkia and Israir.

“Israelis are using routes which are available from Europe to either Athens or Larnaca, and from there they buy another ticket to self-connect to and from Israel, which increases the demand, and we are taking advantage of it,” said Strassburger. “We see a lot of traffic from tech and business people traveling to the US or Europe with a layover in Larnaca.”

As foreign carriers have been sluggish to resume their routes to and from Israel and US carriers have halted their services completely, travelers have become almost entirely dependent on Israeli airlines. The high demand and low availability of seats have led to a sharp surge in ticket prices by tens of percentages over the past year.

“The most critical issue is not only the price but the seat availability, especially when flying to the US, since there is no other option besides El Al. So if you have to or want to travel to New York and there is no space, you need to fly with a layover in Larnaca, or Athens, or London, and buy two separate tickets,” said Tali Noy, the vice president of marketing and sales at popular travel agency ISSTA. “It doesn’t make the trip cheaper, and often ends up being the same price as El Al flights.”

Noy noted that especially for business travelers, the length of overseas trips has become much longer.

“In many cases, travelers need hotel overnight stays between connecting flights because you can’t count on the schedule of the charters,” said Noy. “If a direct flight to New York from Tel Aviv takes about 11 hours, reaching the same destination with a connecting flight will take at least 20 hours.”

Tali Noy, VP Sales and Marketing at travel and tourism provider ISSTA Israel. (Courtesy)

Air Haifa was co-founded in 2023 by a group of Israeli entrepreneurs led by Nir Zuk, American-Israeli founder of cybersecurity giant Palo Alto Networks, and Lior Yavor, together with former senior executives of Israel’s flagship carrier El Al Israel Airlines, Gonen Usishkin and Strassburger.

Before the airport closures, it was hoped that the launch of commercial air travel from Haifa would relieve congestion at Ben Gurion Airport. For the many Israelis living in the country’s north, it can provide a closer alternative to the busy airport and help bring down pricey short-haul flights. And to keep costs low, Air Haifa sells tickets solely via its website, Strassburger said.

“We do not have to pay for any intermediary like search engines, or any sort of commission, and we don’t sell bundles or packages,” said Strassburger. “Our offering is simple and transparent as tickets can be booked, changed, or even canceled by self-service on our website.”

Located east of the city, Haifa Airport is run by the Israel Airports Authority and can serve domestic and international flights, including to the Ramon airport in Eilat, as well as nearby international destinations such as Larnaca, Paphos, Rhodes, Crete, and Karpathos. It was established by the British in 1934 and was the first international airport in Israel. At the time, it served the British Royal Air Force and the joint Iraqi-British oil company.

Following last week’s US-brokered ceasefire deal with Hezbollah and the recent reopening of airspace in the north, Air Haifa is now planning to launch its services from Haifa Airport on December 22.

“We are initially aiming to have two flights a day to Eilat and three to four flights to Cyprus alongside plans to launch flights to Athens,” said Strassburger. “For 2025, we have on the table Pathos in Cyprus and Greek islands.”