El Al setting up own airline alliance

NEW YORK – El Al, Israel’s leading airliner, is setting up a new international airline alliance which will allow the company to reach dozens of new destinations, reduce prices on existing routes and increase its fleet of passenger jets, Yedioth Ahronoth reported Tuesday.

The move was decided after El Al failed to get accepted into one of the three leading airline alliances. The company understood that even the government was unable to assist it, and concluded that a new strategy was required: A new alliance, smaller than the others, to include companies who are not part of any other alliance.

The first stage will include three companies from Eastern Europe – UTair (Russia), Aerosvit Airlines (Ukraine) and Armavia (Armenia) – in addition to the Israeli company, and it is hoped that at least 20 other companies from Europe and South America will join in the future.

This means El Al will be able to sell tickets to many destinations currently unavailable to El Al customers, such as Tokyo, New Delhi and Singapore in the East, Colombia, Rio de Janeiro, Lima and Buenos Aires in Latin America, and major cities in Canada and the US. At a later stage, it is hoped that Scandinavian cities will also be added to the list of new destinations.
It  is as yet unclear whether Australian travelers would also experience benefits from the new alliance.

Passengers will buy a ticket through El Al, which will fly them to their destinations via a connecting flight operated by a member company. El Al passengers will also be able to collect air miles on these flights. Business class passengers will also be able to use the business lounges of all participating companies.

The alliance will be known as WE (from the initials of western-eastern). An agreement of principles has been signed by the first four airline companies. Intensive negotiations are underway for a final agreement within 90 days.

El Al’s past attempts to join an alliance have been thwarted often due to political reasons: All the major alliances include Arab companies which have vetoed the participation of an Israeli company. This has left El Al isolated and struggling to expand.

Airline alliances have become a dominant feature of air travel in recent years, with many major companies joining. Passengers benefit in a number of ways, including a wider range of destinations and flights, cheaper tickets, and flexibility in loyalty schemes.

Airlines benefit from more efficient operation by using flights of other companies, cooperating on maintenance, joint purchasing of aircraft, and mutual assistance in filling seats. However, the move also entails a considerable investment, to coordinate systems and operations.

Arie Egozi