Israel cabinet OKs Europe open skies deal despite strike

Sun Apr 21, 2013 1:56pm EDT
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By Ori Lewis and Steven Scheer

JERUSALEM (Reuters) - Israel's cabinet on Sunday approved an open skies agreement to boost airline traffic to and from Europe, defying a strike by workers at El Al and two smaller airlines who fear the greater competition with foreign airlines will cost them jobs.

Israel's flag carrier El Al responded to the strike and government vote by announcing it would ground flights at Israel's main Ben Gurion International Airport near Tel Aviv, until further notice.

Supporters of the open skies aviation deal - which will go into effect next April - say its relaxation of restrictions and quotas on flights between Israel and European Union countries will increase competition and help Israel's economy.

"The reform ... aims to lower air fares to and from Israel and boost incoming tourism," Prime Minister Benjamin Netanyahu said as the cabinet approved the deal by a 16-3 vote.

To help airlines El Al, Arkia and Israir prepare for the rise in competition, the agreement will be gradually phased in over the next five years.

"The open skies agreement is the only way for El Al to economize at long last and to change its approach so that it can compete in the tough world market," Transport Minister Yisrael Katz told Israel Radio.

A major complaint of Israel's airlines is high security costs compared to foreign competitors but the government said it would cover 80 percent of this. El Al spent $33 million on security in 2012.

Ofer Eini, head of Israel's Histadrut labor federation which overseas hundreds of thousands of public sector workers, said the agreement could leave Israel's airlines struggling to compete and could cost 17,000 jobs.   Continued...

El Al planes are seen parked at Israel's Ben-Gurion International Airport near Tel Aviv, during a strike by airline workers, April 21, 2013. REUTERS/Nir Elias