How Israel's travel will be affected by the war as summer approaches

The phrase “Now is the winter of our discontent” is spoken by Richard in Shakespeare Richard III.

The 2024 summer of discontent will be known by three things never to be believed – the true, the probable, and the logical.

In his soliloquy Richard opines:

Now are our brows bound with victorious wreaths;

Our bruised arms hung up for monuments;Our stern alarums changed to merry meetings,Our dreadful marches to delightful measures.Grim-visaged war hath smooth’d his wrinkled front.

Shakespearian experts assert that the message indicates that the bad times are behind us.

After nearly eight months of death and destruction, with hostages still being held in the clutches of the barbarous Hamas and its cohorts, I see no such message in the coming summer. Like a pebble thrown into a body of water, the ripple effects of this war will resonate for years throughout Israel and the Jewish people.

True, most experts and much of Israel believe the war will end with a whimper and not with a bang.

It brought to the forefront levels of antisemitism, both in Europe and North America, never before seen since the rise of Nazi Germany.

Our defenders are small in numbers, the antisemites are fueled with billions of dollars and are effectively entering and altering the consciousness of millions of people. Israel has stopped being seen as the Land of Milk and Honey or the Start-Up Nation. Israel and the Jewish people are portrayed as the abusers and purveyors of all that is wrong in the world.

El Al receives high amounts of profit

El Al, the quasi-national carrier, once again posted record profits, for the first quarter of this year. It released numbers that were, on the surface, mind-boggling. It posted a profit of $80.5 million this last quarter, after incurring a loss of $34m. during the same period in 2023. Revenue jumped 48% in the first quarter to $738m. and even grew 9% from the last quarter of 2023, as the war broke out on October 7.

It is true that El Al’s airfares have also reached historic levels, resulting in an onslaught of both consumer complaints and hints of government interactions.

“Declare it a monopoly,” many a populist politician said, decrying that, in the middle of a war, an airline with nearly 80% of the market share could engage in price gouging. “Boycott them” rings many an Internet meme and Instagram post. Go to Athens or Europe and switch to a foreign airline where the savings could be hundreds of dollars.

Of course, both politicians and populists forget to mention that El Al’s 80% market share wasn’t the result of good marketing or positive reports on El Al’s security or seasoned retired Israel Air Force pilots flying its fleet. It is because of the dearth of competition. Where are Air Canada, American Air, Delta Airlines, and United? Anyone seen a Cathay Pacific plane landing at Ben-Gurion Airport?

Their absence reeks not of cowardice or antisemitism, as many have suggested, but is the result of a simple business model that recognizes that while we are at war, the level of incoming tourism to our beleaguered country is not very high.

Yes, those airline unions refuse to sleep over in Israel if we are at war. Unlike British Airways, which did resume flights but picks up its crew members in Larnaca, so they don’t need to spend a night at a Tel Aviv hotel, those airlines mentioned have chosen not to follow that option. Insurance premiums for airlines flying in and out of Israel are at the apex, yet most European airlines are paying that price to fly in and out of Tel Aviv.

News flash: Both United and Delta are resuming their daily flights from Newark and JFK, respectively. Delta made a loud brouhaha about returning to Ben-Gurion Airport after eight months; United’s return is without much fanfare. They both are gnawing at the bit to enjoy the high fares set by El Al; and with so few Americans planning on flying here this spring and summer, they have no intention of lowering fares and starting a price war.

Will they stick around if things heat up in Lebanon? Color me skeptical.

What so many of us who care deeply about Israel seem to forget is that we are not at the center of the earth. Just as so many Westerners don’t even know what occurred on October 7, vast stretches of the world do not care one iota about Israel and its people. Do you really maintain that the billions in India and China, or most of South America, even know of Israel?

KLM, the Dutch carrier, announced it was ceasing flying from Amsterdam to Tel Aviv for all of July and August. The most famous line in Dutch is “Het is zoals het is.” It is what it is. KLM didn’t suspend flights in May or in June, but only in July and August. Some new antisemitic canard going through the canals of Amsterdam? No, KLM simply did the math and, with the dearth of Dutch tourists coming to Israel this summer, saw it could use its planes on a far more profitable route.

El Al CEO Dina Ben Tal Ganacia has been a dynamic manager during the war, positioning her carrier as staying in the air through thick and thin. Taking victims and survivors abroad is one small step El AL has done. Offering soldiers discounts is another.

She dismisses criticism that El Al took advantage of the war to price gouge, arguing it is a matter of supply and demand. She has been quoted urging foreign airlines to resume flights to Israel and “restore stability to the regional aviation market.” Admirable, but do be careful about what you wish for.

LET US explore, then, what is probable this summer, starting with the North American corridor.

The odds are good that, somehow, some way, both Delta and United will return flying between the US and Israel. It may only be a daily flight, but those airline executives read how much El Al is making, see the fares that El Al can get, understand the market is underserved and that they can easily enter the market earning huge profits on their routes.

Will they have to raise the pay structure of the crews flying in and out of Israel? Perhaps. Will they try to get some Israeli government support, as has been given to low-cost carriers in the past? Perhaps. The Israeli government pays 100% of the security costs for all three Israeli airlines, Arkia, El Al and Israir. A case will be made that those US carriers returning should enjoy some type of subsidy.

If, miracle of miracles, a ceasefire is announced and enforced, more airlines will scurry back to Tel Aviv.

In all probability, the Israeli public with not see airfares dropping with the return of more carriers. High season and increased demand to both Europe and North America (unlike India – tourists abhor flying there in the summer) will result in airfares staying at stratospheric levels.

More importantly, those hordes of tourists who dotted the beaches of Netanya and Tel Aviv or clogged the Mahaneh Yehuda market or Ben-Yehuda pedestrian mall in Jerusalem will not be seen this summer, even if a ceasefire is announced. Leisure clients make their summer plans well in advance, and traipsing around Israel has been off the agenda since October 7.

We’ve seen when COVID petered out that hotels came back with a vengeance, charging rates unheard of. Restaurants around the world took advantage in the return of tourism to their humble abodes, raising menu prices by tens of percent.

Plan your summer trip, but until we know that a ceasefire holds, be wary of buying on a foreign airline. Wary, but not ignoring those airlines completely. Buyer beware is the rule. Know what happens if your airline stops flying. What type of refund do you get? Cash or credit? Will the airline move you to an airline that is flying? These are the questions, now more than ever, that you must ask.

Buying online for travel should be thought through carefully. The savings may be there, but these days what is paramount is service. That Israeli travel agencies and their consultants are booming is precisely because in these uncertain times, we demand, we covet, some type of control in our life. Having a human being to work with gives one that control.

Israeli businesspeople have been traveling in record numbers this year. With the US economy booming and inflation not the looming menace economists feared, our war has had no effect on the global business world. Meetings and conferences proliferate on the travel calendar.

 El Al has benefited greatly from this. My business clients run the gamut from physicians who live in Israel but work in the US to Israeli executives in companies involved in AI and food technology. All of them have one thing in common. They need to travel to meet their partners, suppliers, and clients.

The year 2023 was a very difficult one for the hi-tech market, for citizens, and for families. The Israeli hi-tech ecosystem was subjected to a perfect storm: Global economic events, Israeli political developments, and the outbreak of war made it very challenging to operate, raise capital, and invest.

The year 2024 is showing a different picture. More than 10 Israeli companies have been acquired this year for over $2 billion. Seven come from the cybersecurity industry. Israeli cloud security company Wiz just raised $1b., and the average salary in the hi-tech industry in Israel is at a record level.

Logically, this war will end. When and how and the political ramifications remain unknown. The endgame remains elusive. We are living in the middle of a hurricane which is causing havoc everywhere it touches down. But end it shall.

The writer is the CEO of Ziontours, Jerusalem, and a director at Diesenhaus. For questions and comments, email him: mark.feldman@ziontours.co.il