Israeli Airlines Seek Government Aid to Cover Tourism Losses From Gaza Conflict

Airlines request lower fees, help with wages; Transport Ministry developing plan.

AP

Israel’s airlines on Monday asked the government for financial aid, citing the tourism slump resulting from Operation Protective Edge, and the Transportation Ministry said it was working on a plan to help the carriers.

The request for aid came in a letter signed by the chief executives of El Al, Arkia and Israir and addressed to the ministers of transportation, finance, economy and tourism.

In the letter, the CEOs asked the state to reduce the fees the airlines pay at Ben-Gurion International Airport at least through year’s end. They asked the government to defer payments and to exempt them from these charges so long as the fighting continues.

The airlines are seeking state-backed loans to pay suppliers and to boost their cash flow, and they want help covering wage costs and a grant to cover the cost of employees who are called up to the reserves.

The carriers asked the state to cover the cost of the longer flight paths necessitated by the fighting. And they called on the government to increase advertising to draw tourists back to Israel, and to give incentives to local companies that buy tickets from Israeli airlines.

Last week, the Transportation Ministry had rejected a request by foreign and Israeli airlines for compensation.

In a request to Transportation Ministry Director-General Uzi Yitzhaki, the head of the local branch of the International Air Transport Association, Kobi Zussman, asked that the ministry reduce the fees that local and foreign airlines pay to the Israel Airports Authority so they can use the services of Ben-Gurion International Airport.

Zussman’s request followed a discussion of the subject by the Knesset Economics Committee earlier last week. The Knesset must approve the airport fees proposed by the IAA. These fees account for roughly 40% of the IAA’s revenue, which is estimated to total hundreds of millions of shekels.

According to Zussman, a temporary reduction of airport fees is a common practice and not just in emergency situations. He noted that Greece, for example, has lowered its fees until March 2015, in an effort to encourage airlines to use its airports.

In response to the IATA request, the Transportation Ministry explained that the IAA has also lost money as a result of the conflict.

“Unfortunately, as a result of the current security situation, and in light of the difficulties in operating regularly scheduled flights in and out of Israel during Operation Protective Edge, the IAA has also incurred losses,” said Asaf Shamli, a senior adviser to the ministry’s director-general. “Therefore, lowering airport fees by the IAA at Ben-Gurion airport would cause further losses in revenue, which are used for developing airport infrastructure in Israel.”