EL AL finally understood that the market has changed and will change at a much faster pace.
The Israeli airline will operate five Boeing 737/800 aircraft on low-cost flights. Budapest, Berlin and Prague will be among the first destinations to be served and later others such as Cyprus and Greece will be added. The main business routes, such as Frankfurt, London and Paris, will not be replaced with low-cost flights.
The very late move of EL AL is one of its responses to the “Open Skies” agreement after it wasted precious time trying to oppose the agreement. It was a lost cause because it was obvious that it would be signed and implemented.
If all goes to plan, regular service to the low-cost destinations will be halted as early as April 2014, and all ticket sales will be carried out within the low-cost programme. The low-cost fare structure is built on a base ticket price, with special charges for extras, such as seating upgrades, luggage, check-in etc.
Unlike other low-cost carriers, which sell tickets exclusively online, EL AL will allow low-cost tickets to be sold by travel agents. This is in order to keep its good relations with the travel agents.
EL AL’s previous attempt to sell cheap tickets to Europe, through a separate “Basic” brand, failed. Three years ago, it offered discount fares that did not include check-in or meals. It ended the deals after three months because it was not generating the expected revenue.
The EL AL low-cost flights will depart from the main terminal at Ben-Gurion airport, not from the new area of Terminal 1 that opened last week to serve low-cost flights. This, again, is a somewhat strange decision as the cost for the airlines that use the older terminal is lower.
According to the Israeli Airports Authority, 55 international flights per week are expected to pass through the new wing this winter as part of the implementation of the Open Skies policy.
An EL AL spokesman said: “EL AL is planning short-haul operations, with five Boeing 737-800 airplanes, to destinations that will be set and publicised by the company’s management. The plan is to begin operating in this area no later than the 2014 summer schedule.”