Last update - 00:00 20/12/2007
Transportation Min. proposal could reduce prices on Israeli airlines
By Zohar Blumenkrantz, Haaretz Correspondent
Transportation Minister Shaul Mofaz submitted a proposal Thursday that would see the state fund 80 percent of Israeli airlines' security costs, in exchange for which other Israeli carriers would be allowed to compete with El Al on all scheduled routes.
The proposal, which will be submitted to the cabinet for its approval next month, marks a dramatic step towards opening Israeli skies to competition.
If approved, the initiative would lower airlines' high security expenditure, which would likely reduce ticket prices by close to $50 per ticket.
"This is a true revolution," Mofaz said, adding that if approved the proposal would "benefit the traveler, first and foremost, and would also improve the tourism industry and the Israeli economy."
The transportation minister said he was "determined" to see the proposal through.
The state currently funds about 50 percent of Israeli airlines' $100 million security expenses. The new ruling would see state funding increased to approximately 80 percent in exchange for opening scheduled flights to competing airlines, such as Israir and Arkia.
El Al welcomed the initiative but said "80 percent coverage still does not solve the problem." The company called on the state to fully cover security costs, saying this would "allow [Israeli airlines] to compete [with foreign carriers] on equal terms."
Higher costs of travel on Israeli carriers are generally attributed to the extra security measures those companies employ.
Avi Nakash, one of Arkia's owners, praised Mofaz's proposal, saying the airline "has waited a long time for such a decision."