At a meeting in Jerusalem over the weekend, the European Union's ambassador in Israel, Andrew Standley, implored Transportation Minister Yisrael Katz to put his signature on the Open Skies pact to which the EU and Israel have already agreed. A memorandum of understanding was inked on the deal nearly three months ago, but Katz has delayed signing off on the final agreement after objections were raised over its effect on the local airlines industry.

Standley underlined the importance of the Open Skies agreement, which he said will lead to increased competition that will lower airfares between Israel and Europe. The agreement is due to loosen regulatory constraints gradually on air travel to and from Europe.

Katz has delayed signing the accord due to pressure from Israel's airlines, notably El Al Israel Airlines, which has taken the position that the agreement will lead to the airlines' collapse. The Knesset Economic Affairs Committee has also sought to have the document reexamined for its economic implications.

Over the past several weeks, the Transportation Ministry and the Civil Aviation Authority have looked into whether it would be possible to re-nationalize El Al Israel Airlines due to the company's financial problems and the increased competition that is expected following implementation of the Open Skies agreement. When asked for its reaction, the airline, which was privatized in 2003, said it was unaware of any talk of re-nationalization and is therefore not in a position to respond.

In some positive news for the company, Histadrut labor federation chairman Ofer Eini and El Al CEO Eliezer Shkedy agreed yesterday to continue efforts to resolve the labor issues at the airlines and, at the request of El Al's management, to put off for a week a labor court hearing scheduled for tomorrow. The management claims that the pilots had disrupted flight operations, and the court issued an order barring such activity. For his part, however, the head of the El Al workers' committee, Asher Edri, denied that the pilots had undertaken any labor action.

During his meeting with Transportation Minister Katz, the EU's Standley was told that the Open Skies agreement is in the final stages of the approval process; this involves an examination by several ministries over the implications of the agreement vis-a-vis Israel's airlines. It is then to be submitted to the cabinet for approval.

Also in Jerusalem last week was the president of the European Commission, Manuel Barroso, who met with Prime Minister Benjamin Netanyahu. The two discussed furthering economic cooperation between Israel and the EU.

JFK airport popular in June

In other aviation news, more than 1.1 million passengers passed through Ben-Gurion International Airport in June, according to the Israel Airports Authority, which was marginally higher than June of last year. The route between Tel Aviv and New York's Kennedy airport proved the most popular for the month, with 67,930 passengers.

Similarly, routes to and from the United States also carried more traffic in June than routes to and from any other country. Nearly 141,000 travelers flew between Israel and the United States over the course of the month, accounting for nearly 13% of all the traffic at Ben-Gurion.

Among other leading destinations, the countries that saw the greatest rise increase in travel to and from Israel in June were Turkey, Russia and Austria. Looking ahead to the winter season, however, German airlines Lufthansa announced Saturday that it was cutting capacity on its flights to and from Israel by 15% as part of its effort to deal with the crisis in the international aviation industry.

Lufthansa lost about 400 million euros in the first quarter of the year alone. The German airlines' office in Israel explained that the reduction in seat capacity, which goes into effect on October 28, was part of the airlines' policy to only use its long-haul aircraft on longer flights than those between Germany and Israel.