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After closing its Tel Aviv-New York route, reducing its flights to Europe and firing 30% of its employees, Israir - and its owners, Nochi Dankner and Avi Fischer - seem to be giving up on the dream to turn the airline into an a regular international carrier and compete with El Al instead of remaining just a charter and local airline.

The airline was the first to take up the fight against El Al on its New York flagship run, it also was the first in Israel to break the Boeing monopoly and fly Airbuses, but that was in the past, and now Israir is shrinking to once again become just another small airline fighting for its survival, and one with an uncertain future.

"We are not in trouble," stated Israir chairman Guy Rosen, though teh carrier has experienced a 23% drop in passengers in the first six months of 2008. Its share of passengers flying through Ben-Gurion International Airport by Tel Aviv fell to 3.3% in July, down from 3.8% in July of 2007.

On September 13, Israir will be ceasing its regular flights to New York and return the Airbus A-330 it leased for the route. the airline will remain with two smaller A-320s and four small commuter planes for internal flights.

High fuel costs and fierce competition from El Al and foreign airlines made the long-range flights unprofitable. Even on internal Israeli routes it is losing passengers, with a drop of 13.4% in passengers to Eilat in the first half of 2008 compared to last year.

Israir once had high hopes to fly not only to New York but also to Miami and Los Angeles. Even its plan to fly regular routes to European cities seems to be in doubt. The airline had requested approval from the Transportation Ministry earlier this year to receive routes to London, Paris, Berlin, Moscow, Rome, Amsterdam, Kiev Munich, Verona and Milan and was awarded Rome and London.