Israir Group has reached a provisional a provisional block-seat agreement with tourism agency Issta which will support the Israeli operator’s planned acquisition of a pair of Airbus A330s.
The carrier says that, under the arrangement, Issta will provide an advance payment of $35 million for an allocation of 40 seats on each commercial flight operated by the widebodies.
This payment will be made in three instalments – of $8 million, $12 million, and $15 million – in stages running to 10 February.
Israir Group adds that it will pledge an Airbus A320, as well as additional collateral, to demonstrate its commitment to the seat allocation.
Issta says it will be granted 40 economy seats on each flight, for a period of 10 years, except on services which have been “sold in full” to a third party.
The price of seats paid by Issta will be determined by a formula which takes into account specifics of the route flown and an offset – up to $3-4 million per year – from the advance payment.
Israir Group indicates that the aircraft will begin operations no later than 15 May.
“As the fleet of widebody aircraft increases, [with a] third wide-body aircraft and more, the parties will negotiate to determine allocation arrangements for the third aircraft,” says Israir – although it adds that there are no immediate plans to expand the fleet beyond two.
