New Israeli airline aims to boost competition, lower flight prices

The leading Israeli tour company Kavei Hufsha is planning to launch a new airline with the aim of increasing competition in Israeli skies. The company already owns two other smaller European airline companies, Tus Airways and Blue Bird that are limited to European destinations.

The new airline is expected to offer more competitive prices to non-European destinations and is expected to become operational within 18 months from Israel’s Ben Gurion Airport. 

"We have begun the process with the Civil Aviation Authority to obtain a license for a new Israeli airline," co-owner Ami Cohen said in an interview with the news outlet Ynet last week.

"This airline will operate alongside our existing carriers, not replace them. They will continue to serve Israel, while the new airline will complement them. It will be owned by Kavei Hufsha and serve as a sister company to Tus Airways and Blue Bird. We are a privately owned group and intend to remain so," he continued. 

Following the Hamas Oct. 7, 2023, attack on Israel, many foreign airline companies postponed or cancelled flights to and from the Jewish state due to security reasons.

In September 2024, European authorities urged airline companies to avoid Israeli and Lebanese airspaces due to the war between Iranian-backed Lebanese terrorist militia Hezbollah and Israel.

This led to a dramatic increase in the price of air tickets as Israeli airlines like El Al, Arkia and Israir enjoyed a near monopoly on many flights to and from Israel. 

Many Israeli and international travelers complained that especially El Al was taking advantage of the situation by charging unreasonably high prices for air tickets. 

“El Al is really price-gouging and taking advantage of the lack of competition,” the Israeli traveler Adi Livne said in August last year. “It’s pretty ugly to exploit a crisis like that. It’s not something I would have expected, given the Israeli sense of solidarity,” she added. 

However, the internationally brokered ceasefires with Hezbollah and Hamas have prompted a growing number of foreign airlines to resume flights to Israel. Earlier in January, international airlines like Swiss Air, Lufthansa, Australian Airlines and Brussels Airlines announced that they would resume flights to Israel due to the improved security situation. 

Although European destinations remain important, Cohen believes that there is also a local Israeli demand for non-European flights. 

"Many Israelis travel outside of Europe, and we want to fly there too," he assessed. "I believe the Abraham Accords will expand, peace agreements with Saudi Arabia will be reached, and flights to Saudi Arabia and other currently inaccessible destinations will become possible. Increasing competition from Israel is the right move, and there is definitely room for another airline," Cohen stated. 

Kavei Hufsha is not the only local actor that seeks to increase competition in the Israeli skies. Last October, the new Israeli airline company Air Haifa launched its first flight from Israel’s Ben Gurion Airport to Larnaca, Cyprus. 

There appears to be cautious optimism among Israeli and international travelers that the growing competition in Israeli skies will eventually lead to a dramatic reduction in air tickets to and from the Holy Land.