Israel and the European Union have finalized negotiations on a comprehensive aviation agreement during a final round of negotiating in Tel Aviv last week.
The agreement will gradually open up and integrate the respective markets, strengthen cooperation and offer new opportunities for industry, including airlines, and consumers.
Following eight rounds of negotiations since December 2008, the two sides have agreed to develop a common aviation area between Israel and the EU based on common rules. It is expected that the agreement will offer more travel opportunities, more direct connections and economic benefits for both sides.
"The comprehensive aviation agreement reached in Tel Aviv is very important for further strengthening the overall economic, trade and tourism relations between Israel and the EU. Israel is a key partner for the EU and the agreement will do much to develop the aviation links between the two partners and establish a high level of regulatory convergence", said Siim Kallas, EU Commissioner responsible for transport.
As a result of the agreement, all EU airlines will be able to operate direct flights to Israel from anywhere in the EU and Israeli carriers will be able to operate flights to airports throughout the EU.
The EU–Israel air transport market will be opened gradually so that by the start of the summer season in 2017, the market will be fully open with no restrictions on the number of weekly flights between Israel and the EU.
Based on the experience of similar agreements signed with other EU neighbouring countries, the gradual opening of the market is expected to encourage a larger number of direct flights from Israel to more destinations in Europe at lower prices than today while also reducing flight prices to Israel for European travellers.
Higher volumes of tourism in both directions are expected to create additional jobs and economic benefits on both sides. The gradual implementation of the agreement will give sufficient time for carriers on both sides to prepare for increased competition.
In parallel to gradually opening up the respective markets, the agreement also aims to integrate Israel into a wider Common Aviation Area with the EU. Israel will implement regulatory requirements and standards equivalent to EU aviation rules in areas such as aviation safety, environment, consumer protection, including passenger rights, air traffic management, economic regulation, competition issues and social aspects.
The agreement will be a further step in creating a wider Common Aviation Area between the EU and its neighbours. Similar comprehensive aviation agreements with neighbouring countries have already been negotiated with the Western Balkan countries, Morocco, Jordan, Georgia and Moldova and negotiations are ongoing with Ukraine and Lebanon and are planned to soon start with Azerbaijan and Tunisia.
In 2010 the overall EU–Israel air transport market was 6.75 million passengers, which represents an increase of 13.4% compared to 2009.
The EU is the most important aviation market for Israel, accounting for 57% of scheduled international air passenger movements to and from Israel.
Israel is one of the most important aviation markets for the EU in the Middle East with a strong growth potential.
Today, there are scheduled direct passenger flight connections between Israel and 16 EU Member States: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, France, Germany, Greece, Hungary, Italy, Latvia, The Netherlands, Poland, Romania, Spain and the United Kingdom).
Israel's flag carrier El Al lost 7.8 million US dollars in the fourth quarter of 2011, compared with a profit of 16.3 million dollars in the last three months of 2010 due to higher jet fuel prices and increased competition from foreign airlines.
The Israeli carrier's market share from Tel Aviv's Ben Gurion International Airport fell to 33.9 percent at the end of 2011 from 37.1 percent in 2010.
El Al's Chief Executive Elyezer Shkedy said the company faced continued rise in competition from giant partnerships and foreign companies which has more than doubled in the past five years. The airline implemented cost-cutting measures last year, including the elimination of 200 jobs in the last quarter.

EJP