Arkia Goes Rogue With Vacation Package to Eilat Rival Aqaba

Lower-cost option includes Tel Aviv-Eilat flight and hotel at Jordanian resort

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People board an Arkia flight to Eilat, January 2019.
People board an Arkia flight to Eilat, January 2019.Credit: Moti Milrod

Arkia, the Israeli airline that’s is nearly synonymous with the southern resort of Eilat, this week began selling package tours to Israelis for Aqaba, the Jordanian resort just next door.

Israelis increasingly vacation in Aqaba. Figures from the Israel Airports Authority, which tracks all Israeli arrivals and departures, show that after a few slack years, the number of Israelis visiting Jordan surged 28% in 2018 to 53,300. During this year’s Passover holiday the number rose 22% from last year, to 5,806.

The competition between the towns extends to the foreign market: Many Europeans take subsidized flights on low-cost carriers to Israel then cross over to Jordan to stay at an Aqaba hotel.

Unlike Egypt, Jordan doesn’t let Israelis into the country freely. Visitors to Aqaba must show proof of hotel reservations. Israelis wanting to visit Petra or Wadi Rum must reserve a Jordanian guide in advance.

Arkia offers package deals from 799 shekels ($198) a night at an Aqaba hotel, including round-trip airfare between Tel Aviv’s Ben-Gurion International Airport and the new Ramon Airport in Eilat. It’s a price Eilat hotels, with their higher operating costs, cannot hope to match. One-way airfare alone is usually 370 shekels.

Ironically, the Nakash brothers, who own Arkia, also own the Orchid chain of hotels, which includes one property in Eilat.

The new competition from Aqaba comes at a difficult time for Eilat’s efforts to lure Israelis sea-and-sun visitors. The Ramon Airport opened in April offering a glittery alternative to the convenient but ramshackle downtown airport that had served the city for years, but in fact air traffic to the city has fallen.

In the first half of the year, the number of people flying the Tel Aviv-Eilat run dropped 9% to 642,000. In June alone, traffic was down 9% to 105,000. Arkia, which controls about 70% of the market, saw passenger numbers fall 8%. Rival Israir saw a 12% decline.

To make matters worse, there was a 5% increase in the number of flights, which means planes were flying with more empty seats.

The problem is probably going to get worse after the Sde Dov Airport in Tel Aviv, which accounted for more than half the traffic on the route, closed July 1. Fliers now have to leave from Terminal 1 at Ben-Gurion, which tourism and airline officials say will deter flying and saddle the two carriers serving the once highly profitable route with losses.

Earlier this month Avi Nakash said Arkia would lay off 250 staff due to the Sde Dov closing. “In May we had 20,000 fewer passenger than we did the same time a year ago,” he told a meeting of the workers committee July 3. “We lost 4 million shekels in revenue. ... If we want to stay in business, some employees need to go.”

Nakash rescinded the decision a day later, but put the workers designated for layoffs on an involuntary, paid vacation that ends Sunday.

Nir Dagan and Uri Sirkis, the CEOs of Arkia and Israir, respectively, met with Transportation Ministry Director General Karen Turner this month to discuss solutions. Sources at the meeting said among the solutions discussed was for the government to subsidize the Eilat route based on the number of empty seats on flights. Another is that each passenger would be subsidized, as the Tourism Ministry now does with international flights to Eilat.