BA Doubts Low-cost Flights to U.K.

Transportation Ministry Director General Gideon Siterman has left for London to meet separately with the company directors of BMI and easyJet, to arrange their introduction to Israel. The arrival of low cost airlines from Britain is a direct threat to British Airways, and may result in competition that would jeopardize profits on the route to and from Israel.

But Yael Katan, CEO of British Airways in Israel, is doubtful. In an exclusive interview with TheMarker she said that, "Firstly, the costs of operating the route are relatively high - for instance, the cost of fuel. Secondly, the low cost airlines are based on a frequent rotation of planes. Because of the relatively great distance between Britain and Israel - five hours flight time - there is little opportunity to take advantage of a high rate of rotation, and it is relatively unprofitable."

Katan also added BMI is not a low cost airline, and as far as she is aware, does not fly out of London airport to Israel - as another airline was authorized to do in recent aviation discussions between the countries that wound up this week. However, Katan added, "I have no objection to opening the skies to competition on routes between Israel and Britain. Some have tried, and failed."

The easyJet directors will present terms of their introduction into Israel to Siterman, who will report to the Public Committee for Open Skies, which he heads, on the initial terms.