What open skies? - Haaretz

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Tue., January 29, 2008 Shvat 22, 5768

Israel Time: 01:48 (EST+7)

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What open skies?

By Nehemiah Shtrasler

Tags: Shaul Mofaz, Israel, El AL

Transportation Minister Shaul Mofaz is rolling on the floor laughing. El Al Israel Airlines is applauding. They cannot believe how easy it was to mislead the media with the "open skies" trick. Again, for the hundredth time, it fell for the slogan. The headlines were festive: Mofaz suddenly became the great reformer. But the truth is that nothing has changed. What was is what will be. Competition will not increase, service will not improve, more foreign airlines will not fly to Israel, low-cost airlines will not arrive, the number of flights will not increase, and the prices will not fall. The only thing left will be Mofaz's successful spin.

The cabinet meeting on Sunday was held under the Sword of Damocles called the Winograd Committee. Ehud Olmert did not have the patience to pay attention to the discussion. He was busy with other things while the experts were talking. He is completely focused these days on the fight to keep his post; what does he care now about "open skies."

When El Al was privatized a few years ago, the works committee attained an unusual achievement, by which the company would be given exclusivity on foreign routes until the number of travelers passing through Ben-Gurion International Airport reached 10.7 million a year. The company did not realize that air travel would increase so quickly, but 2007 saw 10.1 million travelers. The expectation is that this year the number will reach the desired 10.7 million, and then Israir and Arkia will be able to begin regular flights to wherever they want.

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Now comes the big trick. Instead of waiting patiently a few more months and getting the achievement for free, suddenly the Transportation Ministry offered to "buy" El Al's agreement, and thus the cabinet decided on Sunday to increase its funding of Israeli airlines' security costs from 50 percent to 80 percent.

The cabinet did not look into what security costs are, for example, for American companies, which are not subsidized at all. The result is that the Israeli companies will get another $30 million from taxpayers, with El Al getting the lion's share: $27 million a year, long-term. This is no more than an annoying transfer of money from the taxpayer's pocket to the pockets of the wealthy, without getting any real return for it.

This is a time of bargain-basement sales; the budgetary framework is being breached every day. It is the blowout sale of Olmert and the director-general of his office, Ra'anan Dinur, who are willing to do anything to survive. Therefore there was no real discussion in the cabinet. Olmert was not even listening to Finance Minister Roni Bar-On's reasons for opposing the move, and the latter left the meeting angrily after the vote. Olmert had closed the deal with Mofaz beforehand, and gave him a fake media gain only so Mofaz would be, perhaps, more moderate in his criticism of the handling of the Second Lebanon War.

During the cabinet meeting, Mofaz said - without batting an eye - that the decision would lead to "open skies." But the truth is completely different. The decision dealt only with the three leading Israeli carriers. And there is no chance that the tiny Arkia and Israir will seriously compete with El Al. Israir is not even properly taking advantage of the approval it already has to fly directly to New York. Therefore the supply of seats will not increase and the prices will remain scandalous.

Mofaz is not doing the only thing he needs to do: He is not pushing ahead the talks with the European Union for "open skies" with Europe. Only when such an agreement is signed will all the international airlines, including the low-cost carriers, fly to Israel unimpeded. Only then will prices fall. That is what happened, for example, between Europe and Morocco. Morocco upped its incoming tourism by dozens of percentage points the moment it signed an "open skies" agreement with the European Union.

But Mofaz knows that the captains of wealth will not cotton to a true "open skies" agreement, and they wield no small amount of political clout in the party central committees. That is why the issue has been dormant, and the public continues to suffer airline ticket prices that are way too high, and in too little supply. And Mofaz will continue to scoff at the government, the media and the public, who are so easy to mislead.

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