The Bottom Line / Why the fear of competition?
The joke of fate is that when Borovitz headed Arkia, which was not so long ago, he was a huge warrior against El Al's destructive monopoly. Now he is on the other side.
El Al 1. More than 1.1 million passengers will fly national air carrier El Al this winter. This 4 percent gain over last winter is hardly surprising given El Al's monopolistic power and improvements at the airline since it was privatized.
El Al 2. A friend of mine, coming to Israel next week, bought a round-trip New York-Tel Aviv ticket for the stunning price of $1,560 plus tax. Had he flown to Athens, he would have paid $750 plus tax. He checked flights again yesterday and found he had saved a little money, because now the ticket is going for $2,158 (no, that is not a typo), while the flight to Athens has climbed to $790.
There are two possible explanations. One, we are a far more in-demand destination than Athens. Two, there is competition on flights to Athens, but none on the Tel Aviv route. Naturally, the second explanation is true. U.S. airlines that once flew to Israel don't anymore, and El Al is vehemently opposed to letting Israir start regular flights.
El Al 3. El Al Chairman Izzy Borovitz says he's in favor of competition, but first the agreement with El Al must be fulfilled. He means the prospectus in which the state undertook to give El Al exclusivity on the New York route for another few years.
But a close examination of the prospectus reveals that the state also has a few escape hatches that Tourism Minister Abraham Hirchson plans to exploit. Let's hope he decides soon on Israir's entry into the regular New York-Tel Aviv market - and that ticket prices drop appropriately.
The joke of fate is that when Borovitz headed Arkia, which was not so long ago, he was a huge warrior against El Al's destructive monopoly. Now he is on the other side. But anyone familiar with the Borovitz brothers' aviation management prowess can sleep well knowing El Al will profit nicely even after Israir hits the skies.
El Al 4. And how am I so sure El Al will succeed? The changes and improvements at the company are evident to the naked eye: occupancy rates on flights are climbing, and service is improving.
Last week I flew El Al to Paris. Flight attendants were more polite, pilots were nicer, the food was better, drinks were free, and we even got a Paris city guide for free. So why be afraid of Israir?
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