El Al Unveils New Low-Fare Brand
Facing the prospect of increasing competition from European carriers, El Al Israel Airlines plans to launch a new low-fare brand named Up next March. Up will start by offering one-way introductory fares of $69 for departures from Israel to Prague and Budapest; and $99 to Berlin, Kiev and Larnaca, Cyprus.
The new Up brand “brings a declaration of renewal and addresses the changing needs of the aviation world,” Elyezer Shkedy, El Al president and CEO, said in the launch announcement. “We are joining the international aviation trend and the major airlines, while being attentive to our customers’ various preferences.”
Plans call for El Al’s low-fare division to offer two ticket types: a basic ticket requiring passengers to pay additional fees for baggage, in-flight refreshments and other services; and a “smart” ticket that includes a variety of services, access to the King David Lounge at Tel Aviv Ben-Gurion Airport and flexible ticket conditions. The airline did not specify which type of aircraft will be branded as Up, but an image the carrier provided shows a Boeing 737-900ER in Up livery.
In June, Israel and the European Union signed a comprehensive open-skies agreement meant to gradually integrate the two air transport markets by 2018, providing for more direct flights between Israel and EU member countries. Israel’s three airlines opposed the agreement out of concern that higher security costs would place them at a competitive disadvantage to European carriers. After airline employees conducted a brief strike in April, Israel’s finance ministry agreed to pay a higher share of airline security costs.
El Al also confirmed that Shkedy, a former Israel Air Force major general, formally resigned from the airline on December 1, less than a week after the Up launch announcement. He has agreed to continue to serve as chief executive until El Al names a successor.
In excerpts from a resignation letter El Al posted on its website, Shkedy made reference to the new arrangement between the airline and Israel’s government to pay security costs. “After an extended struggle, we came to an agreement that greatly increased the state’s share in security expenses. This brought the airline’s security situation in line with that of other airlines in the world and, without doubt, substantially improved the airline’s competitive edge,” he said.