After nearly two years of war, capped by the intense 12-day conflict with Iran last month, Israel’s skies have fully reopened and with the return of the major foreign airlines expected in the coming weeks Israel’s flag carrier El Al will soon be facing something completely novel since the Oct.7, 2023, Hamas-led attack on southern Israel as they seek to maintain the loyalty of their customers: full-scale competition.
Travel experts cautioned that it will take some time for airfares to return to what they were before the Hamas attack which triggered the 21-month old war and led to soaring prices and profits as foreign airlines repeatedly suspended service to Tel Aviv leaving El Al and the smaller Israeli carriers as Israel’s only gateway to the world.
Israel’s national carrier has won both plaudits for flying throughout the war and stinging criticism over allegations of price gouging last year at a time of record profits, which is the subject of an ongoing investigation and a class action lawsuit.
“El Al played a central role during a time when the skies were nearly closed, serving as an essential bridge for the Israeli public,” Yoni Waksman, deputy chairman of Israel’s Ophir Tours, told JNS on Wednesday. “However, we cannot ignore the high prices and the difficulties that passengers faced when trying to enter and exit Israel.”
“Now with international competition returning, El Al will need not only to maintain its position but also to justify its pricing and regain the trust of Israeli travelers,” he added. “Profitability cannot rely on a temporary monopoly – it must be built on quality service, operational stability and transparency towards customers. In an open market, consumer loyalty is earned again with every flight.”
Sticking with blue and white?
For now, Israelis’ loyalty to the national carrier remains strong despite the grumbling over its high fares, according to Israeli travel agents.
“The question of how much loyalty El Al will retain once the major foreign carriers return to Israel is an unknown,” Mark Feldman, CEO of Ziontours Travel Agency, told JNS. “Loyalty is very fickle. Many passengers have sworn off Delta and United and will stick with El Al, but if they return with lower prices, that loyalty will be tested.”
“In principle, clients seek both security and good prices. For now, the pendulum has swung in El Al’s favor—people want an airline they know will be flying and a large majority are willing to pay the cost. When life and our skies return to normal, El Al’s market share will drop dramatically.”
Indeed, with an eye to the future, the very day United announced that it was returning to Israel later this month after suspending service with the June 13 closure of Israel’s airspace at the start of the Israeli military strike against Iran, El Al announced it would be expanding service to the US this winter, with 42 weekly flights, including 27 to and from New York, 6 to and from Florida and Los Angeles each and 3 to and from Boston.
Notably, during last month’s conflict with Iran, El AL also offered one- way capped return economy fares for the tens of thousands of Israelis stranded abroad, clearly cognizant of last year’s public backlash over their high fares. The anger that still lingers in some of the public’s mind was mitigated when foreign carriers repeatedly canceled flights during regional flare-ups, leaving Israelis stuck abroad.
‘When you buy El Al, you buy security’
“We see that the public’s confidence in Israeli companies went up a lot because they continued to fly throughout the war,” said Shirley Cohen Orkabi, vice president at Israel’s Eshet Tours Group, in an interview with JNS. “There is a clear preference among Israelis for Israeli companies, with the price being one of many factors, which is clearly affected by supply and demand.”
That sense—driven home by the tens of thousands of Israelis stranded abroad during the 12-day conflict with Iran in June—is El Al’s gold standard.
“Israelis love to travel and, unlike in Europe, our gateway to the world is by air,” she said, noting the profitable Israeli aviation market. “When we return to normal, there will be enough for everyone.”
