Five Airlines Vie for Israel-New York Route, Price Drops Expected Post-Holiday
The crucial air route between Israel and the New York area is undergoing its most significant transformation since the start of the war, with the number of airlines offering direct flights set to increase from two to five within two weeks. Israir received final approvals from Israeli and U.S. aviation authorities and began selling tickets for its inaugural flight from Tel Aviv to JFK on September 15, with the return flight on September 17. This marks an earlier start than previously announced, following the completion of FAA certification. Israir has invested approximately $85 million in two wide-body Airbus A330 aircraft for this route, with plans to lease two more and acquire a third owned wide-body by mid-2027.
Currently, El Al and Arkia have been operating the route throughout. Delta resumed its daily service between JFK and Tel Aviv on an Airbus A330-900neo yesterday, and United will launch two daily flights from Newark to Tel Aviv on September 8 using Boeing 787 Dreamliners. Israir joins on September 15. Arkia is increasing its capacity for the upcoming holidays, utilizing a Boeing 787-9 and an Airbus A330-300, with a brief operational stop in Larnaca for crew changes on eastbound flights. American Airlines is notably absent and not expected to return before 2027.
This surge in competition on the New York route coincides with increased competition in Europe, as SAS Scandinavian Airlines will restart its Copenhagen-Tel Aviv route on October 26. The increased competition is partly a response to El Al's dominant market share on transatlantic routes, which stood at 92.3% in the second quarter, contributing to El Al's significant revenue and profit growth. However, the Israel Competition Authority has initiated proceedings against El Al, alleging monopolistic practices and excessive pricing during the war period, proposing fines of up to 121 million shekels. The authority also proposed a 110 million shekel fine for allegedly preventing Arkia access to maintenance hangars.
While the increased number of carriers is expected to lower prices, this effect will likely not be felt until after the High Holidays due to peak demand and pre-booked flights. Price samples for September show round-trip fares around $2,680 on Delta. By late October, prices are projected to drop to approximately $1,550, with some tickets for the Christmas and New Year period found for under $983. This price decrease is attributed to the new supply meeting normal demand only after the holiday season concludes. El Al's forecast for a modest 6-10% increase in seat capacity for the third quarter suggests a focus on maintaining profit margins rather than aggressive market share acquisition.
The stability of this increased competition remains contingent on the security situation. The U.S. Embassy in Israel issued a warning about potential security escalations, which could lead to flight cancellations and airspace closures, disrupting travel. The absence of American Airlines since October 2023 and repeated delays in Delta and United's return flights highlight the fragility of the route's stability. The return of five airlines, with Israir strengthening the Israeli presence, promises lower fares after the holidays, but the long-term viability depends on sustained security.
