For many years El Al had a monopoly on transporting agricultural exports by air. The price was inflated: $900 per ton, which gave some entrepreneurs the idea of setting up a competing company. El Al, which was then a government-owned company, made things hell for them, putting up countless objections and exerting a great deal of pressure. Just like the present day, its objections focused on its special situation. Following a long struggle, the entrepreneurs received permission, in the mid-70s, to establish a competing company called “CAL Cargo Airlines.”
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The new company offered a price of $500 per ton, thereby forcing El Al to lower its prices and improve its service. The result was a substantial increase in agricultural exports to Europe, large foreign currency revenues, an improvement in the farmers’ circumstances and a rise in employment.
Now we are dealing with a similar situation. Once again there is a conflict of interest between El Al and the good of the economy. Once again El Al is arguing that its situation is special, and that therefore the Open Skies agreement with the European Union shouldn’t be signed. It uses the high costs of security (which indeed must be addressed) as an excuse to block any competition against it. It doesn’t tell us that during the summer there are not enough available seats on flights to Israel, and that as a result we are losing many tourists and considerable income. The low-cost airline Easy Jet rushed to announce that it would expand its services to Israel as soon as the skies were opened to competition.
Throughout history, we’ve been “special.” The pressure groups always have all sorts of reasons to keep enjoying the favorable conditions and tidy profits − at the public’s expense.
In 1991, for example, the manufacturers opposed plans to expand competition with all their might. But they still came to fruition, and brought about lower prices of clothing, footwear, electrical products, tools, furniture, household items and more, resulting in an improvement in everybody’s quality of life. Then, too, there were threats of thousands of job losses and industrial collapse, but it didn’t happen.
Textile workers moved to other industries, including service industries, and the economy moved from outdated enterprises that weren’t able to pay their workers the minimum wage to high-tech and biotechnology enterprises that can pay much more.
El Al is a very inefficient company, with a large surplus in manpower, cumbersome management and high salaries. It hasn’t had a personnel reform since it was privatized in 2004, due to the substantial power of the unions. Now it will be forced to undergo a comprehensive streamlining program, and then it too will be able to enjoy the possibility of flying to any destination in Europe.
In this case as well, just like in 1991, the economy will generate enormous benefits from the fact that travelers to and from Israel will stop paying the “El Al tax” on every flight. The number of tourists will rise, as will employment in inbound tourism − which doesn’t just include hoteliers but also restaurateurs, waiters, taxi drivers, tour guides, bus company employees, store owners, souvenir manufacturers, staff at tourist sites and museums, and more.
In the demonstrations against the signing of the agreement, airline employees carried a sign reading “the people demand aerial justice.” This is true. We need justice, and open skies are the definition of “aerial justice.”
Politically, Prime Minister Benjamin Netanyahu, Finance Minister Yair Lapid and Transportation Minister Yisrael Katz needed this struggle like they need oxygen. It establishes them as brave leaders who are not afraid to confront Histadrut labor federation chairman Ofer Eini. Soon, Netanyahu and Lapid will present a budget with tough cuts, tax hikes and reforms that will lead to far more serious strikes. Will they succeed then, too, in standing up to the Histadrut chief without surrendering?
In any case, immediately after the strike ends they should send a greeting card to Eini. He turned them, unintentionally, into real leaders.