- Steve Jaffe
Israel signs air service agreements with UAE and Bahrain
Just weeks after signing the historic normalization agreements with the UAE and Bahrain, Israel has concluded air service agreements with both countries.
The UAE deal calls for the establishment of 28 weekly passenger flights between Tel Aviv and Abu Dhabi and Dubai. Additionally, 10 cargo flights will be permitted between the three cities, as well as an unlimited number of charter flights to the new Ramon International Airport near the Israeli Red Sea resort city Eilat.
Etihad has announced its intentions to launch flights between Tel Aviv and its Abu Dhabi hub. The airline has already operated two cargo flights carrying coronavirus aid to the Palestinians earlier this year, and flew the first passenger flight between the two countries with a 787-9 carrying its nation’s diplomatic mission for face to face meetings in Tel Aviv on October 19.
Emirates has indicated that it will serve Tel Aviv from Dubai. It is presumed that El Al will represent most of the Israeli operations, but no official announcement has been made. Israir says it will offer flights to Abu Dhabi, Arkia plans to fly to Dubai, and perhaps Sharjah. While the initial hope was to start flights between the countries with a matter of weeks, both governments have pushed the start date to January due to the coronavirus.
The Bahrain agreement allows for 14 weekly passenger and five cargo flights between Manama and Tel Aviv. It also permits unlimited flights between Manama and Eilat. Gulf Air reportedly has applied for four weekly flights. No Israeli carrier has yet to announce plans to serve Manama.
Tel Aviv-Dubai is by far the largest potential of the three main routes. Emirates can feed passengers through its massive hub at Dubai International Airport to destinations throughout the world. Practically speaking, for connections to and from Tel Aviv that would include, more or less, Central and East Asia, East Africa, the Gulf countries and Oceania. Anything to the west of Israel (Europe and the Americas) would require too much backtracking. And as a destination, Dubai has built itself into a global center for finance, tourism, and trade. It’s Manhattan, Las Vegas, Rotterdam, and Orlando all wrapped up into one.
Emirates can reasonably expect to fill a 777-300ER to Tel Aviv given both the origin and destination (O&D) and connecting traffic. While it will stimulate growth in new markets, it will also put increasing pressure on El Al on routes to Asian in which it enjoyed a monopoly. Emirates has a far larger network and can connect passengers through Dubai to just about everywhere. El Al will need to leverage its non-stop routes from Tel Aviv to cities such as Beijing, Hong Kong, and Mumbai in which all but the most cost-conscious travelers are willing to pay some premium to avoid a stopover. It will be interesting to see if Fly Dubai enters the market. Operating 737s, the carrier would assume less risk and has the advantage of feeding connecting traffic through Dubai through its partnership with Emirates.
While it lacks the international swagger of neighboring Dubai, Abu Dhabi provides an attractive market in its own right. As the nation’s capital city, it captures the government-related travel, and is a business center with global reach of its own. Etihad too can feed passengers through its Abu Dhabi hub, and has the advantage over Emirates in that it can serve Tel Aviv with its A320 series, reducing its exposure and providing potential for increased frequencies.
Manama represents the smallest market of the three. It’s hard to see Bahrain effectively competing for Israeli tourists against the bigger draws of its more glitzy Emerati neighbors, but in the other direction, there is keen interest in the Gulf States for visiting Jerusalem, as well as just plain curiosity to see Israel, which as been essentially off-limits to its citizens since its creation. And it can be assumed that there will be a fair amount of business travel on the route. Of course, there is potential for feeding traffic through Gulf Air’s hub in Manama. But given its much smaller network as compared to Emirates and Etihad, those connecting opportunities will be limited.
Cargo flights are expected to draw considerable interest. Both Emirates and Etihad operate dedicated cargo fleets and have global reach. And simply the ability to provide air freight directly between Israel and the UAE and Bahrain will provide capacity and frequency and lower prices that enable trade between these dynamic economies and provide stimulus for growth.
DHL has already announced that it has established the first logistics connections between the UAE and Israel, although the details were not made clear. It will be interesting to see if DHL’s Bahrain-based subsidiary will operate cargo flights between Manama and Tel Aviv.