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El Al: Foreign Airlines Guilty Of Price Fixing

El Al Israel Airlines Ltd. filed a complaint with the Israel Antitrust Authority over price fixing by foreign airlines on transatlantic routes, following the closing of its direct Tel Aviv-Sao Paulo route because it was unprofitable.

El Al claims that the A++ pact creates impossible competitive conditions because its North American routes are its principle source of revenue and profits.

El Al says the A++ pact members are among the world’s largest international carriers, which should compete against each other. Instead, they cooperate almost fully on all subjects and even share revenue. The carriers coordinate flight frequencies, destinations, types of equipment for operating routes throughout the year (including on Shabbat and Yom Tov) and code sharing.

For example, a person traveling from Tel Aviv to San Francisco can take Lufthansa via a direct connecting flight from Frankfurt to San Francisco on a new Airbus 380 superjumbo. An alternative flight would be to take United-Continental Airlines from Tel Aviv to Newark and a connecting flight to San Francisco. A third alternative is to fly Air Canada via Toronto.

A top aviation source told Globes El Al closed its Sao Paulo route after two and a half years as a consequence of its inability to compete on transatlantic routes because it not a member of an international aviation alliance. It is doubtful if an airline like El Al has the right to exist in the long term, against such a cartel, without membership in a global alliance, the source said. The issue is highlighted in view of the “open skies” agreement with Europe, which could be signed soon.

(Source: Globes)

2 Responses

  1. El Al is the last choice of airlines for me. Until they figure out that people have a choice of airlines and start respecting their customers, they will continue to loose revenue. Joining an alliance will simply allow them to stop other airlines from flying to Israel.

  2. How about improving the level fo service? I had the unhappy experience of ringing for a flight attendant on a NY-TLV flight about 30 minutes into the trip. When we landed in Tel Aviv, the button was stil;l on.

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