Arkia Rages as El Al Offers NIS 80 Flights to Eilat

Competition for the air route between Eilat and central Israel has escalated yesterday. The Civil Aviation Authority held another hearing on the matter yesterday before making a final decision on whether to let El Al operate regular flights to the southern city alongside Arkia and Israir, which are fighting tooth and nail to keep the bigger airline out of their turf.

"We aren't fighting against El Al's daily flight to Eilat. We are concerned about the ability of Israeli airlines other than El Al to exist," said Arkia CEO Gad Tepper after the hearing.

"Arkia welcomes the competition but would be happy if international routes would open up [for Arkia] first," Tepper added.

El Al, Tepper says, commands 95% of all air traffic rights in Israel, so for real competition to exist, both national and international air traffic should be considered.

Transportation Minister Yisrael Katz decided to allow El Al to operate a route to Eilat last August, but the move is being revisited after Arkia and Israir appealed to the High Court of Justice. Arkia and Israir see El Al's move as a threat following their attempt to enter the international market dominated by El Al.

Tepper considers El Al's strategy an attack on the smaller airlines in markets where they are stronger "to teach us a lesson" and "warn us against getting in their way at other destinations."

According to an El Al spokesman, "We can understand why the other companies are afraid to lose their monopoly. Just as the Open Skies policy was implemented on international routes, the Transportation Ministry is expected to implement the policy on internal routes."

The Open Skies policy set out to deregulate access to given markets.

The El Al spokesman promised that licensing the airline to operate an Eilat route would bring down prices and increase local and international tourism in Eilat by double-digit percentages. More guests would stay at the Red Sea resort city's hotels, he said.

The El Al spokesman said the airline plans to lower the cost of flights for Israelis, increase the number of flights, and combine local and international routes.

Making good on its word, El Al announced yesterday that it is offering tickets to Eilat for a bizarrely low NIS 80 one way, Army Radio reported.

Arkia launched newly discounted flights to Eilat last week under its campaign "Express Arkia." The sale offers tickets at NIS 99 one way. The tickets will be available by advance reservation of six weeks through the company's Web site. They will be nonrefundable and nonexchangeable.

Like other low-cost tickets, no in-flight meals or drinks will be offered, and customers will be charged another NIS 25 for each piece of luggage. Low-cost seating will be available only on a limited number of flights, generally twice daily, and departing only from Ben-Gurion International Airport.

The flight to Eilat is considered Arkia and Israir's most profitable route. According to figures published by the Airport Authority, local travel to and from Eilat increased by 5% in November compared with the same period last year. A total of 94,200 passengers passed through Eilat's tiny airport that month. Arkia carried 62,000 passengers, Israir 32,000.

The introduction of El Al as a competitor on the Tel Aviv-Eilat route could sting Arkia's business to the extent that 150 Arkia jobs could be in peril.

During the hearing yesterday, Arkia employees held a noisy demonstration in front of the Civil Aviation Authority's offices at Ben-Gurion Airport to protest a possible El Al route to Eilat.

Protesters addressed the Civil Aviation Authority and Antitrust Authority, holding up signs that said "Don't ground us" and "You didn't give us the world, don't give them Eilat." They also carried a mock coffin, which, according to union chairman Yigal Cohen, symbolized the death of Arkia.