State to Subsidize Unprofitable El Al, Arkia Flights to Amman, Cairo

Airlines threatened to discontinue flights due to high security costs; gov't to widen financial aid to prevent discontinuation of flights.

Israeli airlines El Al and Arkia will receive special financial aid from the government that will allow them to continue maintaining regular flights to Egypt and Jordan, the Transportation Ministry announced Tuesday.

El Al threatened to discontinue flights to Egypt and Jordan because they were unprofitable. Consequently, the cabinet approved a proposal drafted by Transportation Minister Shaul Mofaz calling for the government to increase the subsidy of the airline's security expenses thus ensuring the continuation of the routes.

The move is not expected to affect the prices of the flights.

The security expenses on El Al and Arkia Jordan and Egypt flight routes are exceptionally high, and currently 50 percent of the expense is subsidized by the government. The Treasury and the Transportation Ministry alongside the Prime Minister's Office will determine how much the government subsidy will be increased, but sources estimate El Al's portion of the expenses will decrease to 25 percent.

The government hinged the subsidy on the continuation of the flights at same frequency that they have been operating until now. El Al currently maintains two flights a week to Cairo and Arkia operates two flights a week to Amman. Haaretz has previously reported that El Al was losing NIS 20 million a year operating these flights.

Mofaz said Tuesday "the existence of regular flight to and from Egypt and Jordan is of primary importance in the political sense. Flight agreements between the countries, in direct continuation of peace agreements, dictate the existence of regular flights between the countries, and any change or discontinuation could be construed as a violation of these agreements, with all the far reaching political repercussions derived from that."