State to Subsidize El Al, Arkia Flights to Amman and Cairo

Israeli airlines El Al and Arkia will receive special financial aid from the government to allow them to continue operating regular flights to Egypt and Jordan, the Transportation Ministry announced yesterday.

El Al threatened to discontinue flights to Egypt and Jordan because they were unprofitable. Consequently, the cabinet approved a proposal drafted by Transportation Minister Shaul Mofaz calling for the government to increase the subsidy for the airline's security expenses thus ensuring the continuation of the routes.

The move is not expected to affect ticket prices.

The security expenses for El Al and Arkia's Jordanian and Egyptian routes are exceptionally high, and currently 50 percent of the expense is subsidized by the government. The finance and the transportation ministries, along with the Prime Minister's Office, will determine the subsidy increase, but sources estimate El Al's portion of the expenses will decrease to 25 percent.

The government has conditioned the subsidy on continuing to operate flights at the same frequency. El Al currently maintains two flights a week to Cairo and Arkia operates two flights a week to Amman. TheMarker has previously reported that El Al was losing NIS 20 million a year operating these flights.

Mofaz said yesterday: "The existence of regular flights to and from Egypt and Jordan is of primary importance in the political sense. Flight agreements between the countries, in direct continuation of peace agreements, dictate the existence of regular flights between the countries, and any change or discontinuation could be construed as a violation of these agreements, with all the far-reaching political repercussions derived from that."