Israeli Airline Stocks Soar Amid Suspected Terror Plot on Flydubai Flight

Shares of Israeli airlines El Al and Israir experienced significant gains on Wednesday, rising 7% and 5.4% respectively on the stock exchange. This surge follows a serious security incident on a Flydubai flight originating from the UAE and bound for Tel Aviv.

The positive trend is attributed to assessments by top security officials that the co-pilot, an Omani citizen, intentionally attempted to crash the aircraft carrying 174 passengers. The growing suspicion that this was a planned terror attack is expected to alter Israeli consumer travel habits.

Investors anticipate that many travelers will now opt for Israeli airlines, which employ pilots with Israeli Air Force backgrounds and operate under state-funded, stringent security measures. Although El Al does not currently operate direct flights to Dubai for security reasons, analysts believe the airlines will benefit from diverted demand. Passengers concerned about connecting flights in the Emirates may prefer direct flights with local carriers.

Flydubai, a major player on routes to the Emirates holding 3.5% of all passengers at Ben Gurion Airport (TLV), had become a popular transit hub for Israelis after Istanbul was no longer used following the outbreak of the war. This status may now be significantly impacted.

El Al commands a 44% market share of all passenger traffic at TLV, while Israir holds 13.5%. Wednesday's jump continues a positive trend for El Al stock, which has risen hundreds of percent in the last three years. For Israir, these gains are seen as a correction after recent declines.