The government will subsidize El Al Israel Airlines Ltd. (TASE: ELAL) and Arkia Airlines Ltd. flights to Amman and Cairo. The cabinet made the decision at the request of the Ministry of Transport.
A joint team from the Prime Minister’s Office and the Ministries of Finance and Transport will determine the amount of the subsidies. The subsidies will be conditional on the airlines making regular scheduled flights to these destinations at least as often as set in Israel’s aviation agreements with Jordan and Egypt.
Minister of Transport Shaul Mofaz said it politically important for Israeli airlines to continue operating flights to Jordan and Egypt. He emphasized that Israel’s aviation agreements with these countries, which are part of the peace treaties, mandate the operation of civil aviation links and that halting flights could be interpreted as a violation of the peace treaties. He said that Israel’s economic ties with both Egypt and Jordan have been growing stronger in recent years, and that continuing civil aviation links were important for ensuring the development of economic relations.
A few months ago, El Al said that it would discontinue its route to Cairo, as well as flights to Turkey, because of their high security costs. The Ministry of Transport promised to subsidize the flights so that El Al would reverse its decision.
One of the decisions of the Siterman committee on open skies was for the full financing the security costs incurred by Israeli airlines. The Ministry of Finance has not yet responded to this proposal.
Published by Globes [online], Israel business news - www.globes.co.il - on May 9, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007