Tensions in the Middle East are driving up air fares substantially

The tense situation in the Middle East, which has led to the cancellation of several flights by major airlines to Tel Aviv, has the immediate effect of airlines increasing the cost of freight by 10-15% and exploding passenger prices , according to Israeli news sites Jerusalem Post, Calcalist, The Times of Israel and N12.

If the period in which the flights carried out by foreign companies will be longer than that after the events of October 7, 2023 or after the attack on Israel by Iran on April 13-14, 2024, companies in the Holy Land fear a shortage of medicines, medical equipment and and other electronic equipment, note the cited sources, who state that 50% of freight to and from Israel is carried out by air, including passenger planes.

We remind you that among the global companies that canceled their flights to Israel during this period are Delta Airlines, United Airlines, Lufthansa Group (Lufthansa, Swiss Air, Austrian Airlines, Brussels Airlines, Eurowings), Iberia Express, Air Europa, Aegean, Air India, Fly Dubai, ITA, KLM, LOT, Vueling, Wizz Air.

According to the Israel Manufacturers Association, 60% of imported goods are medicines and various materials needed for the electronics industry. In order to maintain the continuity of the production process, the entrepreneurs appealed to the Minister of Finance, Bezalel Smotrich and the Minister of Economy, Nir Barkat, requesting the establishment of a mechanism to ensure the smooth movement of goods to and from Israel with the granting of compensation to the airlines, so that tariff increases are not borne by the business environment.

According to data recorded at the end of June by the aeronautical authority in Israel, the volume of goods that left that country by air travel amounted to 28,000 tons, while 27,800 tons of goods entered the Holy Land by air.

The Israeli companies El Al and Arkia continue to operate the routes in the portfolio, but due to the high level of occupancy and the limited number of aircraft at their disposal, they face great difficulties in meeting the demand. And this can be seen in the prices of plane tickets, which for those who want to fly to and from Cyprus reached 300 dollars, and for certain flights from Athens to Tel Aviv tickets were sold at the price of 1000 dollars a piece, according to Jerusalem Post, which drew the ire of Israel's Transport Minister Miri Regev. This, in a debate in which Oz Berlowitz, the CEO of the Arkia airline, also participated, said, according to the quoted source: "A thousand dollars for a plane ticket from Athens is an unreasonable price." The statement came after the head of Arkia said that the price of a passenger ticket to and from Athens is set by the company's IT system in response to high demand.

Miri Regev warned those who want to fly to and from Israel under these conditions that flight prices could increase even more on return flights, saying, according to the Jerusalem Post quoting the N12 TV station: "If you fly, it is possible to you have to pay more for the return; this should be considered by you."

According to an analysis carried out by the N12 TV station, Ben Gurion Airport was at its peak last week with about 75,000 Israelis and 434 flights. Following threats from Iran at the end of the week and the cancellation of flights by foreign airlines, passenger numbers fell to 55,000 on Sunday, with only 329 flights operating.

During this time, Antony Blinken, the US Secretary of State, is talking with the leaders of the states in the Middle East to restore the coalition regarding Israel's air defense, a coalition that was active during April 13-14, 2024. Then, a massive attack with drones and missiles from Iran was thwarted by a coalition that included Israel, the United States, Britain, France, Qatar, Egypt, Jordan, Saudi Arabia, the United Arab Emirates and Bahrain. We note that, two days ago, Antony Blinken conveyed to his counterparts in the G7 countries that Washington believes that an Iranian attack on Israel could take place within 48 hours at most, but stated that the US does not know the exact moment of planning the Iranian attack.

The Egyptian authorities have announced, however, that they will not participate in such a regional military coalition, according to the Qatari daily Al-Arabi Al-Jadid, quoted by The Times of Israel. Moreover, Egypt will close its airspace to any military action that would threaten regional security, that is, including any rockets fired from Yemen towards Israel by the Houthi rebels.

The move by the authorities in Cairo takes place in the context in which Iran refused the request of the US that the reprisals against Israel established following the killing of Fuad Shukr - the military leader of Hezbollah and Ismail Haniyeh - the leader of Hamas - should not exceed a certain limit and not lead to the escalation of the conflict in the Middle East.

Meanwhile, General Michael Kurilla, the US CENTCOM commander, who would coordinate the forces of the regional defense coalition, arrived in Israel yesterday. The US general's arrival in Israel came on the same day as Iran issued a flight operations notice for the center, west and northwest of the country, advising aircraft to change their original routes. The notice was issued after authorities in Tehran said yesterday that Iran was not seeking to escalate regional tensions but felt it needed to punish Israel to prevent further instability, and called on the United States to end support for Israel, which it they defined as the aggressor state.

In this context, according to Agence France Presse, the UN High Commissioner for Human Rights, Volker Turk, requested an urgent de-escalation of the situation in the Middle East: "I am deeply concerned about the increased risk of a wider conflict in the Middle East and I ask all parties, together with those states of influence, to act urgently to reduce the risks of the current precarious situation".

As for the attack that Israel was expecting last night, at the close of the edition, from Iran, Yoav Gallant, the Israeli defense minister, said that the IDF is ready to move quickly from defense to offense.