Splendid isolation in Israeli aviation

Going against the world trend is not possible even in the holy land. While in the real world, airlines merge and unite resources to be more efficient, in Israel three airlines are working hard to survive, each in splendid isolation.

EL AL, Arkia and Israir are operating together a fleet of aircraft that normally serves one very small airline in Europe let alone one of the US giants .

In a small country with a population of less than 8 million, one national airline is enough especially when over 50 foreign airlines are competing in the market.

But when the considerations about operating an airline are not always according to the financial results, that is what happens and it is very strange.

The logical situation is that at least one of the smaller airlines (tiny in international standards) will merge with EL AL, but even if that was on the table for discussion we could expect opposition from the antitrust authority. This authority tends to forget that the real competition to the three Israeli airlines is from the many foreign airlines that operate in the market.

In this absurd situation, EL AL with its medium and long haul network manages for now to show profits. Arkia is trying to get a greater market share with low cost services and Israir is struggling with losses that amounted to appr $14 million in 2009 and $17 million in 2010.

If the emotions are put aside, if the antitrust authority adapts to reality, something good can happen to the Israeli airlines especially when more and more foreign competitors are getting into the market.

And to add some bizarreness to the situation, EL AL has not been able to join one of the aviation alliances. Take this fact with the ones mentioned above, and you get a situation that is more than just strange.





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