State to Pick Up El Al Security Tab for Open Skies Compromise

The recommendation of the Siterman Committee to open up civilian airspace to competition is getting a push from the Transportation Ministry with a draft proposal offering for the state to bear El Al's security costs, while the carrier, in exchange, will cede its agreement with the state, so other airlines can operate regular routes alongside those operated by El Al. TheMarker learned that the proposal will be submitted for government approval by the end of the month.

Transportation Ministry Director General Gideon Siterman, who heads the public committee, together with the heads of the treasury, justice and tourism ministries, is working to achieve an agreed-upon wording of the proposal to be submitted.

The state currently pays half of El Al's security costs, which total about $50 million annually, so the state's bill will double if the proposal is accepted. In exchange, amendments will be made to the agreement signed between El Al and the state on the eve of the company's privatization, which promised exclusivity to the carrier on it's main air routes as long as the annual number of passengers traveling through Ben-Gurion International Airport is less than 10.7 million. Such a change would bring about increased competition, introduction of additional airlines and potentially increase incoming and outgoing tourism.