Summary Overall, Israel's connectivity has worsened year-on-year (YoY) due to the precarious security situation of the country and its airspace. However, its airlines have performed relatively well and have managed to remain profitable. In addition, airHaifa is planning to launch its operations soon, with the startup airline seeking the approval from the local aviation authorities.
With the war in Israel and the Gaza Strip raging on for close to a year now, the country’s air connectivity with the outside world has, naturally, suffered. In August, there were 675 fewer weekly flights scheduled to depart Israel than in August 2023, with several airlines, including US-based carriers such as American Airlines, completely exiting the market for the time being. For some Israeli airlines, the last months have been difficult.
For example, Israir has scheduled 113 fewer departures from its base country year-on-year (YoY) in August, ranking first regarding the number of flights cut during the month. Israel's air connectivity August 2023 August 2024 Change Weekly departures 1,710 1,035 -39.4% Weekly seats 327,499 198,557 -39.
3% Weekly available seat kilometers (ASK) 933.4 million 563.1 million -39.
6% However, for others, this has been a golden opportunity to increase their market share and, due to the imbalance of supply and demand, increase profitability and revenues. Others saw a chance to open up new services from new markets within the country. EL AL’s golden age Since the war, which began on October 7, 2023, many airlines have either cut back on their services or completely ended services from/to Israel, with some carriers reacting to the current security situation and adjusting their flight services accordingly.
However, EL AL, the flag carrier of Israel, has used other airlines’ cuts to increase its market share at the country’s main gateway, Tel Aviv Ben Gurion International Airport (TLV). According to data from the aviation analytics company Cirium , EL AL was the only Israeli airline to increase flights YoY in August, adding 51 weekly flights to its network compared to the same month a year prior. EL AL's capacity August 2023 August 2024 Change Weekly departures 349 400 14.
6% Weekly seats 69,615 78,352 12.5% Weekly available seat kilometers (ASK) 309.1 million 274.
3 million 12.7% At the same time, additional capacity might not always result in increased profitability, especially during such uncertain times as war. Yet EL AL has only managed to grow its revenues and net profit in the past few quarters.
It ended Q1 and Q2 with revenues of $738 million and $839 million, respectively. As a result, its Q1 and Q2 profits climbed to $81 million and $147 million, according to the carrier’s filings on the Tel Aviv Stock Exchange (TASE). Its average load factors during the two quarters were over 90%, with its revenue per ASK (RASK) climbing 5% quarter-on-quarter.
The airline’s Q2 report also indicated that in September 2023, it had a 21% market share at TLV. By November 2023, that climbed to 81%, dropping down to 39% in June, which still was a substantial number for the airline. This is a finalization of a multi-billion dollar discussion that started months ago.
Arkia adding capacity While EL AL is the largest airline in Israel, the country is home to a few others, including Arkia, which has five aircraft in its fleet: two Airbus A321LR and three Embraer ERJ195s. However, while its YoY weekly flights should be 11.5% lower in August, in September, the airline has planned to operate more flights during the month than in September 2023.
Arkia's capacity August 2023 August 2024 Change Weekly departures 96 85 -11.5% Weekly seats 16,125 15,362 -4.7% Weekly available seat kilometers (ASK) 20.
8 million 19.8 million -5.2% To bolster its capacity, it has wet-leased two aircraft, an Airbus A321ceo and a Boeing 737-700 from Fly2Sky and SkyUp Airlines, respectively.
The former has been operating flights on behalf of the Israeli airline since July 25, while the latter has begun displaying Arkia’s flight codes since June 7, according to Flightradar24 records. At the same time, Arkia's owners, including Avi Nakash, had to justify their practices in Israeli media. In an interview with the business daily Calcalist , Nakash admitted that Arkia had sold tickets for very high prices, saying that the airline only responded to the demand after foreign carriers canceled their services.
“EL AL sells an economy ticket to New York for $4,000-$5,000, while in peacetime, such a ticket costs $1,000. So why isn't anyone talking about El Al?” EL AL has also faced criticism in the public discourse about its pricing strategy in the past few months, especially as its market share at TLV has continued to rise. Israeli carriers have added more flights to repatriate citizens and reservists as foreign carriers cancel flights into the country.
Deceptive Israir and Air Haifa starting operations While Cirium data showed that Israir has significantly cut its capacity, Israir’s Q1 report stated that during the quarter, it carried a record number of passengers. The airline was scheduled to release its Q2 report on August 21, according to a filing on TASE. Israir's capacity August 2023 August 2024 Change Weekly departures 132 38 -71.
2% Weekly seats 20,085 5,783 -71.2% Weekly available seat kilometers (ASK) 28.9 million 9.
4 million -67.4% While these have been substantial capacity cuts, Israir has leveraged its business model, which has allowed it to earn revenue from irregular flights, including charter itineraries for tour groups that it sells itself. In Q1, 55% of its revenue came from various tourism items, including vacation packages and tour packages, according to the quarterly report.
The airline added that if security conditions in the country did not deteriorate, it could result in an upgraded annual profit forecast. While shortly after the war began, Israir had delayed the introduction of additional Airbus A320 aircraft , it has added two A320s to its fleet in July, with one A320 being wet-leased from Fly2Sky. Meanwhile, airHaifa, based at the currently dormant Haifa Airport (HFA), is currently seeking its air operator’s certificate (AOC) from the Civil Aviation Authority of Israel (רשות התעופה האזרחית, CAAI) and should launch the sales of its tickets soon.
Ch-aviation fleet records showed that the carrier has taken delivery of its first ATR 72-600 aircraft on July 26. airHaifa is still awaiting for its air operator's certificate (AOC) from the local aviation authorities..
