The cabinet today approved the open skies agreement with the EU, despite the strike by Israel's three airlines - El Al Israel Airlines Ltd. (TASE: ELAL), Arkia Airlines Ltd., and Israir Airlines and Tourism Ltd. The agreement will come into effect in one year.
The proposal submitted to the cabinet stated, "The open skies agreement with the EU is intended to liberalize air routes between Israel and EU member states to allow lower ticket prices between Israel and Europe, and open more destinations across EU member states without restrictions… The agreement will also increase the number of incoming tourists, which will help the economy's soundness. The open skies agreement includes a mechanism for gradually implement it over five years, in order to give Israeli airlines time to prepare for the new competitive structure in the aviation industry."
Minister of Finance Yair Lapid said, "The open skies reform is good for Israel. It will result in lower prices and greater competition, and it will not hurt jobs in Israel, but the opposite." He predicts that the agreement will create 10,000 jobs.
El Al said that of the 22 flights scheduled to depart this morning, thirteen were brought forward to before the start of the strike, and eight flights were cancelled. It added that it was seeking alternatives for passengers whose flights were cancelled, and if none was found, they would receive their money back.
"We won't capitulate to pressure, and we will bring good tidings to Israel - Open Skies," Minister of Transport Yisrael Katz told “IDF Radio" (Galei Zahal) this morning.
The Histadrut and El Al workers committee granted permission for a special El Al flight carrying 60 fathers of children with cancer for the Hayim Association and a cargo flight carrying 60 tons of perishable produce.
Today's demonstration by hundreds of airline employees outside the Prime Minister's Office was violent, and eight people were arrested during confrontations with the police.
easyJet, one of the major foreign carriers that flies to Tel Aviv, welcomed the cabinet decision, saying that, as promised, it would expand service between Israel and more cities in Europe after the open skies agreement was signed. It added that the agreement would enable it to bring more tourists to Israel, strengthening the local tourism industry.
Published by Globes [online], Israel business news - www.globes-online.com - on April 21, 2013
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