Why Is the Open Skies Agreement Creating Such Turbulence?

Israeli airlines are threatening to ground flights starting Sunday when the Open Skies aviation pact between Israel and the European Union goes into effect. What's the fuss all about?

Q. What is the Open Skies agreement?

The Open Skies agreement, between Israel and the European Union, opens up Israeli aviation to competition from European carriers and replaces existing bilateral agreements between Israel and individual European countries. The new pact will gradually abolish current restrictions on the number of carriers in operation, the frequency of flights, capacity and the kinds of aircraft allowed to transport passengers between Israel and the EU. The agreement is expected to increase the number of foreign airlines operating in Israel and increase the volume of activity of currently operating airlines, both Israeli and foreign alike. 

Q. How did the agreement come about? Whose idea was it?

Talks between Israel and the European Commission began in 2008 but both sides didn't actually agree on a plan until July 2012. Originally, the agreement was supposed to go into effect over five years, beginning in 2013, to allow Israel’s airline companies to prepare for the new competition. But in December, Transportation Minister Yisrael Katz announced, with direction from Prime Minister Benjamin Netanyahu, that the agreement wouldn't be brought to the government until after elections; this Sunday it was finally approved by the Knesset. Meanwhile, the council of EU transportation ministers approved the agreement on December 20, 2012, without Israel's signature.

Q. What are the main points of the new agreement?

The agreement distinguishes between various destinations: those serviced mostly by European carriers and those where Israel's three main airlines – El Al, Israir and Arkia – frequently fly. Seven weekly flights will be added every year to the routes that are mostly covered by European carriers. For destinations in major European airports with significant traffic from Israeli airlines, competition from European airlines will increase at a slower rate – three weekly flights a year – to maintain some protection to Israeli airlines during the transition period.

Q. Who will be the main beneficiaries of the agreement?

The winner in this deal is the traveler – both Israeli and foreign. The new competition is expected to drive down prices and increase options for consumers in terms of both airline and itinerary. The increase in tourism to Israel will also boost the hotel industry, local businesses and tour operators. 

Q. How will the agreement affect Israeli airlines?

The Israeli airlines claim the agreement will lead to a significant loss in revenue as well as direct and indirect layoffs of potentially tens of thousands of workers. They claim the agreement will put them at a disadvantage due to their high security costs, global aviation pacts of which Israel is not a part, and inconvenient flight times to Europe. Others claim the competition will force the airlines to become more efficient and that it will benefit them in the long run. The three Israeli airlines employ about 7,000 workers, while the aviation industry as a whole supports another 25,000 jobs.

Tomer Appelbaum