Faced with flight shortage, tech firms relocate staff and seek to run a NY route
As US airlines stay away and fares are high, tech executives embark on plan to operate an airline with leased planes and crews to New York to keep sales and operations running
Sharon Wrobel is a tech reporter for The Times of Israel.
Liad Agmon is managing director of Insight Partners, a New York-based private equity firm that is invested in more than 100 Israeli startups and tech companies. Sitting in an airplane flying back from New York to Tel Aviv at the end of October, Agmon, found himself surrounded by Israel’s leading investors and founders and the main talking point was the frustration about the shortage of flight tickets, the high fares, and the need to move some operations and staff abroad.
“At a board meeting [last month], we told the CEO of one of our companies that we expect him to move to the US and build a team there as soon as possible,” Agmon posted on X. “This is a conversation that is happening today in more and more companies.”
Agmon, a serial entrepreneur, shared the insight in response to venture capitalist Michael Eisenberg’s outcry about the dire business travel situation for entrepreneurs, executives and their employees in Israel, which is causing disruptions to their operations and development plans and is bound to adversely affect the country’s economy.
Since war broke out with the Hamas terror group following the October 7 onslaught on southern Israeli communities, foreign airlines have repeatedly canceled and resumed their flights to and from Israel. In recent months, US airlines completely stopped flying to Israel amid heightened fighting between Israel and Hezbollah in southern Lebanon, and as tensions rise in the Middle East.
Earlier this week, American Airlines announced it is extending the suspension of flights to Tel Aviv from March 2025 until September as Israel escalated its response to Hezbollah’s near-daily rocket and drone attacks, including on central Israel, and came under the second attack from Iran.
Delta Airlines and UK flag carrier British Airways canceled their routes to Israel until April next year joining an array of foreign airlines that have recently extended their flight suspensions. Israeli airlines, namely El Al, Arkia and Israir, have all continued flying to and from Israel throughout the war, only canceling flights when Ben Gurion Airport or Israeli airspace closes.
“If you need to fly to New York next week, there is not even a waiting list you can sign up for in any class whether economy or business,” Eisenberg lamented. “An entrepreneur called me to inform me that he relocated the sales manager and two other support staff to work from abroad because there is no seat availability and flights are expensive when they need to meet customers and attend global conferences.”
As the co-founder of Tel Aviv-based venture capital firm Aleph, Eisenberg manages $850 million in assets. The VC fund has invested in over 60 companies including Lemonade, Melio, Windward, Simply, Honeybook and Empathy.
“The flight suspensions have become more permanent, and at the same time there are fewer and fewer options for investors to come to Israel and for founders and CEOs to meet investors because there are no flights,” Eisenberg told The Times of Israel. “We are seeing over the last 60 days executives and other staff having to move out of the country because they simply can’t get to their customers.”
That’s because Israel’s tech industry doesn’t have a “local market so the availability of flights is the single most important thing for tech companies to be able to operate out of Israel,” Eisenberg added.
Maayan Shahar, director of strategic partnerships at UST Spark Israel, noted that because of the limited flight availability many Israeli executives are now taking longer legs when they travel, and are staying overseas for work for longer periods.
“Some companies have accelerated processes because of the situation, meaning that the CEO or salespeople relocated this year instead of maybe in 2025 or later,” Shahar said.
Israel attracts most of its tech investments from abroad, with the US market representing the main market for expansion. About 80% of venture capital investments in local high-tech startups have been generated from foreign funds in recent years.
The economy’s dependence on the tech sector has significantly grown in the past decades. The tech industry contributes about a fifth of the local GDP, versus 6.2% in 1995, and makes up more than 50% of total exports, while its employees generate a third of the tax revenue collected by the government, according to data by the Israel Innovation Authority.
Like many around them, Eisenberg and Agmon are voicing their disappointment that the government has been missing in action to encourage and support foreign airlines to resume their flight services to Israel.
“What’s incredible is that it wasn’t the war, it wasn’t the contentious judicial reform [proposed in January 2023], it was the incompetence of not being able to get airlines to fly here, that caused Israelis to actually have to leave,” said Eisenberg. “That’s lost tax revenue for the country and lost opportunity to build big companies here.”
Eisenberg has directly appealed to Transportation Minister Miri Regev and Economy Minister Nir Barkat to take action and “do what is needed to remove the siege,” but with no success.
“One thing that the government needed to do is to take care of flights and what worries me is this level of incompetence that is dangerous to our economy and to our prosperity because more and more companies will be growing outside of Israel,” he warned.
Asked about what the government could do to ease business travel, Eisenberg suggested that it could “decide to provide guarantees to foreign carriers or charter more planes and add more flights by local carriers, including to destinations in Europe where there are connections to the US, which is the main market for the high-tech industry.”
But Israel’s tech ecosystem is not waiting for the government to take action.
Israel’s high-tech headquarters — a forum of leading entrepreneurs and founders of startup companies, investors and managers of venture capital funds — is advancing an initiative to operate a seasonal airline with leased planes and crews to bolster the route between Tel Aviv and New York slated to start running in January through at least March.
The forum of tech executives is in talks to operate a total of 36 direct weekly flights that would depart at midnight from Israel and land at Newark Airport early in the morning on weekdays, with one flight departing over the weekend.
“We are experiencing a prolonged shortage of flights and currently there are no solutions for those who need to fly to the US, while prices are sky high,” the Israel high-tech headquarters said. “We decided not to wait for solutions from the Transport Ministry and produce them ourselves.”
“We are planning to open up this possibility to the general public and hope that we will be able to start selling tickets through travel agents offered at fair prices similar to pre-war flights to the US,” the forum added.
The high-tech headquarters was formed as part of the protest movement at the beginning of last year as tech sector workers took to the streets to protest the government’s contentious plans to overhaul the judicial system. It is led by tech executives including Erez Shachar, co-founder of Qumra Capital, and leaders at tech and investment companies such as Papaya Global, Mellanox, Pitango, monday.com, Wix, Yotpo and Fireblocks.
