Eilat’s New Airport: Future White Elephant?

New facility is counting on a continued surge in tourist arrivals that may not happen

Tarmac of the new Ramon International Airport in Timna Valley, north to Eilat, Israel, June 13, 2018.
Amir Cohen/Reuters

The high point of the inauguration of Ramon International Airport near Eilat this week was an Arkia passenger plane coming in from Tel Aviv and landing.

But the fact is, it will be almost a year before commercial flights begin, and even then the risk remains that the 1.8 billion shekel ($500 million) state-of the-art facility could end up being an airport far too big for the city it serves, warn some sources in the aviation industry.

Ramon will have the capacity to handle 2.5 million passengers annually and 20 takeoffs and landings an hour, including a runway capable of accommodating Boeing 747s. Some of that extra capacity is due to a decision made during the 2014 Gaza war to make Ramon Israel’s backup airport if Ben-Gurion International Airport has to be temporarily closed.

But the real case for building such a giant facility is the assumption that the huge growth in international tourism in Eilat as a winter getaway will continue. In the last six months, arrivals at Ovda Airport near Eilat jumped 73% to 63,000, and next winter is expected to match that pace.

Eilat is back on the tourism map after many lean years following a Tourism Ministry decision to subsidize airlines to the tune of 60 euros ($70) per overseas passenger flown in during the peak winter season. But there’s no telling what would happen if the government decided that the subsidies weren’t worth it.

“It wouldn’t become a white elephant but a little white elephant that for most of the year would be used only by Israeli airlines,” said one source close to the issue who asked not to be named. “In the winter season only a few airlines would continue without subsidies.”

Others have warned that even with the subsidies, most of the overseas visitors to Eilat are one-timers. They choose Eilat because of the low, subsidized airfares but then discover that prices in the city itself are high – so they don’t return. Eventually, the critics say, the subsidies will stop generating enough traffic.

Meanwhile, Transportation Minster Yisrael Katz has promised, though unenthusiastically, that his ministry will subsidize landing fees at Ramon for the first three years of operations, a sum that equals $3,000 per flight. Even if the ministry comes through with the aid, without the passenger subsidies it won’t be enough to attract new airlines.

Ramon’s short-term problem remains its opening date. Katz promised two and a half years ago that the facility would be open for its first commercial flights in April 2017.

Now sources told TheMarker that despite pressure to open Ramon as quickly as possible, they don’t see a start date for international flights earlier than March 2019 – and maybe December 2018 for domestic flights. The reason is the lengthy running-in period for the airport to test out its operations.

“The airport requires 480 processes, some of them simple, such as examining the truck that will remove garbage from the airfield, but there are also more complex ones, such as the system for sorting the suitcases between security and passengers,” said a source at the Israel Airports Authority.

The result will be significantly less traffic to Eilat in the next winter season. Airlines that have already sold tickets can easily change the arrivals airport from Ovda to Ramon, but airlines that have not begun to can’t sell them at all.

TheMarker has learned that EasyJet and British Airways have held discussions with the Tourism Ministry about inaugurating their first routes to Eilat next winter, but without an airport they will have to delay to 2019-20.