BICOM

Israel’s Transportation Minister Yisrael Katz yesterday signed an agreement with European Union officials in Luxembourg, which promises to reduce air fares, increase flight options and boost travel between Israel and Europe.

The ‘Open Skies’ agreement has been under discussion since 2008 but was only approved by Israel’s government in April, leading to a brief strike by Israel’s national airlines including flag carrier El Al, who fear that the increased competition will cost jobs. The government eventually agreed to pay for 97.5 per cent of airline security costs and the new regulations will not take full effect until 2018, giving Israeli airlines time to adjust. Under the agreement, EU airlines will be able to operate direct flights to Israel from anywhere in the EU, while Israeli carriers will be able to fly to airports throughout the EU. The increased connections are expected to drive down the cost of air travel.

In 2011, EU-Israel traffic accounted for 7.2 million passengers, making the EU Israel’s most important air destination. The European Commission estimates that by opening up air Israel-EU air travel to more competition, ‘Open Skies’ will yield cost savings of almost £300million a year. Siim Kallas, the European Commissioner for Transport and vice president of the European Commission commented yesterday, “Today’s agreement is very important for further strengthening the overall economic, trade and tourism relations between Israel and the EU. We expect to see more direct flights to and from Israel, lower prices, more jobs and economic benefits on both sides.”  

Meanwhile, last week in Israel an inter-ministerial committee began to review the demands of the country’s airline companies to equalize their operating conditions with those of European carriers.