Transportation Ministry Recommends Unlimited Airline Competition

Recommendations require canceling El AL's monopoly on most routes to and from Israel.

Transportation Ministry director general Gideon Siterman recommended unlimited airline competition Thursday, which would require revoking the national carrier's monopoly on most routes.

"There should be unlimited competition between Israeli airlines to any destination around the world," said Siterman, who headed a committee examining the issue. He is slated to present the panel's findings to the cabinet shortly.

The recommendations will require revising the agreement reached with El Al on the eve of its privatization and canceling the airline's monopoly on most routes to and from Israel. El Al's prospectus clearly states that the transportation minister has the right to add other Israeli airlines to the routes that had previously been exclusively El Al's.

Another recommendation is for the state to completely pay for the security expenses of Israeli airlines. This is an additional $50 million a year, but the committee did not decide whether the funds will come from the state budget or from additional fees to be imposed on passengers.

In addition, the committee recommended opening the old terminal at Ben-Gurion International Airport, Terminal 1, to low-cost flights for 24 hours a day. The terminal is now closed at night due to noise restrictions. The idea is to offer lower fees for airlines operating out of the old terminal and enable budget airlines to operate in Israel.

Also, it was recommended to open negotiations immediately with the European Union in order to reach an Open Skies agreement to be implemented gradually over three years. It is expected that such a deal would cost Israeli airlines $50-75 million a year in lost revenues, but at the same time travelers would save $70-105 million annually. Finally, the committee recommended a number of steps to increase tourism to Israel, which would increase revenues from tourism by $100-300 million a year.