Aftering months of hearings, talks, anf threats it looks like Israir will get designated carrier status on New York route.
For the past few months, Israir has been operating a three weekly charter flight to JFk with a leased 767-300. It is the first time any Israeli carrier has recieved a designated carrier status on routes which EL AL hold a monoploy on.
Israir to get designated carrier status on New York route
Pressure and threats by El Al against the Minister of Tourism were unavailing. The New York route is El Al’s most profitable.
Dalia Tal 13 Dec 05 18:38
Sources inform "Globes" that the aviation and tourism industry believes that Minister of Tourism Abraham Hirchson will allow Israir to operate as another designated carrier on the Tel Aviv-New York route. The sources added that Hirchson was seeking approval for the measure from the Ministry of Tourism. It is believed that he has support from the Ministry of Finance. Hirchson is expected to publish his decision next week.
Israir submitted a request for designated carrier status on the New York route a few months ago. The decision was left for Hirchson after Minister of Transport Meir Sheetrit recused himself because of a conflict of interest.
Hirschson is expected to base his decision on the prospectus for El Al Israel Airlines’ (TASE: ELAL) IPO, which gives him the authority to decide the matter. The prospectus stipulates that the Ministry of Transport has the authority to consider the issue if the number of passengers on El Al’s regular flights on a given route is less than 30% of the total number of passengers on regular flights on the route during the course of the year. The prospectus also states that the Attorney General and the Ministry of Transport’s legal advisor take the position that the Minister of Transport should be allowed to exercise discretion on the issue, even in other suitable circumstances.
Hirchson conducted a hearing with El Al, the its workers’ committee and controlling shareholders (the Borovich group), the Antitrust Authority director general, the Governor of the Bank of Israel, representatives of the Ministry of Defense, and tourism industry representatives. Hirchson was even threatened during the discussions, and the Israel Security Agency (formerly known as the General Security Services, or GSS) tightened security around him.
Published by Globes [online] - www.globes.co.il - on December 13, 2005