Yisrael Katz
Yisrael Katz Photo by Ofer Vaknin
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Transportation Minister Yisrael Katz Monday directed Israel's Civil Aviation Authority not to sign an "open skies" aviation agreement with the European Union. Katz wants his office to examine what effect the agreement would have on Israel's airlines.

Talks on an "open skies" framework, which would replace a number of bilateral aviation agreements with European countries with a single Israel-EU agreement, have been ongoing for several years, but a deal between the sides has proven elusive.

Earlier in the day, before Katz intervened over the open skies deal, the Histadrut labor federation declared an official labor dispute in Israel's aviation industry over the matter. The unions of all three Israeli commercial airlines - El Al, Arkia and Israir - asked the Histadrut to approve the dispute. The unions all object to the proposed agreement, claiming it would harm the airlines by opening the Israeli market to unfair and unequal competition from foreign airlines.

Such an agreement is meant to lower the price of flights by allowing new airlines into the Israeli market, introducing competition. The next round of talks between Israel and the EU is scheduled for March 20.

Katz promised yesterday that he would take into account the interests of Israel's commercial airlines in any agreement to increase competition in Israel's aviation sector.

In a meeting with the heads of Israel's three airlines, Katz said if any understandings are reached with the EU, he would not sign any such agreement before considering its effect on their financial situation. While noting the open skies policy "is intended to increase competition, lower ticket prices and increase the number of tourists," Katz said his role was to "protect the stability of Israeli airlines. As Transportation Minister, I have the responsibility to guarantee the strength of Israeli airlines," said Katz, at the start of the meeting with airline executives.

Katz said it was necessary to work to cancel any arrangements working to the disadvantage of Israeli airlines before signing the agreement, to allow them to compete on an equal basis with European airlines.

The head of Israel's CAA, Giora Rom, also attended the meeting. He reported to the participants on the progress in reaching the open skies agreement with the EU.

Earlier this week, TheMarker reported that the owners of Israeli airlines were discussing a possible merger in light of the difficult state of the industry.

The unions are demanding that the new agreement include sections to protect Israeli airlines, including equal opportunity to receive slots at foreign airports, and creating conditions to allow Israeli airlines to participate in global airline alliances.

The Histadrut also said that Israeli airlines also bear the unfair burden of high security costs. In addition, Israeli consumers have the legal right to receive full refunds in case of canceled flights, something foreign airlines do not guarantee.

El Al's union said it was organizing to fight the agreement, but was not cooperating with management on the matter. "Our goal is to protect our workers," said El Al union head Asher Edrey. He said he was encouraged by Katz's statements and expected him to fulfill his promises not to sign the agreement before examining its effect on the airlines.

Israeli airlines employ some 7,000 workers, and directly support another 25,000 jobs in other aviation-related businesses.