The global airline industry had just begun recovering from the Covid pandemic when the bruised sector in Israel was battered again by the outbreak of the war in October. Most foreign airlines halted flights to Ben Gurion airport and dramatically reducing the number of available flights to and from the country and pushing up fares for Israelis traveling abroad.
Despite the high prices and the uncertainty surrounding the war and a potential escalation in the north, many Israelis are not foregoing overseas vacations and are already booking their summer flights.
Israeli airlines have adapted to the situation to make their tickets more attractive and flexible. ISSTA VP marketing and sales Tali Noy says, “There have always been advance sales promotions with flexible terms for cancelation and changes. We have seen good terms in past years, usually in January, but in March, which is usually a very active month, the companies no longer allow flexibility because occupancy is rising. Today, companies are extending the flexible terms with demand for fares with free cancellation for Israeli travelers has increased.
But flexibility comes at a cost, which is today more expensive than ever. Prices for protecting products are derived from the cost of the plane ticket. According to experts in the aviation industry, the cost of a protected ticket ranges from 8%-20% of the cost of the fare, and since these have become more expensive, protected tickets have also become more expensive.
Israel Association of Travel Agencies & Consultants CEO Tali Laufer says, “Economic logic means that the difference in the cost of a flexible ticket compared with a regular ticket is expressed in the level of risk that the airline invests in the customer. If the customer cancels a flight at the last minute, the airline risks being left with an empty seat. On the other hand, tickets that do not allow flexibility do not jeopardize the airline at all.”
Cancelation until the day before
Laufer says that Israeli airlines are trying to express their understanding for the situation and allowing postponement of tickets until a later date. She explains, “Nobody is to blame for the situation but this is an economic business. The solution that the airline companies have found is to make the terms of cancellation more flexible and in certain cases the passenger cannot receive a refund but can use the ticket in the future.”
Genesis Tours CEO Amir Halle says that although the prices of cancellation have risen but the terms are better with Israeli airlines that are aware of the sensitive security situation and the concerns of people.
RELATED ARTICLES
ISSTA’s Noy explains that El Al allows cancelation or postponement of tickets up to 24 hours before takeoff for passengers departing from Israel before the end of April. “In addition, it’s possible to add a safe product that costs $19-20 and allows cancelation or a change with the passenger receiving a voucher for future use.”
El Al offers three types of tickets – Classic, Lite and Flex. Before the war, cancelation was only permitted with a Classic ticket with payment of a cancelation fee, or Flex at no cost or a small cancelation fee. From the start of the war until the end of January, El Al allowed cancelation on all types of tickets in exchange for a voucher for the full amount on a future flight, subject to the terms advertised. In February the cancelation policy was revised so that customers buying Classic tickets for before April 30 could cancel at no cost up to 24 hours before the flight and receive a voucher for future use.
Israir says that it has not changed its cancellation and changes policy since March 2023 and that the airline has always allowed flexibility for a cancellation or flight change fee. However, in recent months the airline has been offering vacation packages (flight and hotel) Between April and the end of August that allows for cancelation up to 14 days before the flight with no cancelation fee.
Arkia allows passengers to cancel up to 14 days before the flight with no cancelation fee. This is different from before the war when Arkia when customers could only cancel for up to 14 days after buying the ticket, in accordance with the Israeli Consumer Protection Law.
Arkia CEO Oz Berlowitz says, “The impulse to buy right now is short-term because the feeling of security is for a period of up to a month, as the routine of the war stabilizes, then bookings will be for further ahead. This year bookings are very short term. 80% of bookings are for the month ahead and the remainder for the rest of the year. Last year only 50% of bookings were for a month ahead.”
What is happening with foreign airlines
Foreign airlines are less flexible but they also have protected tickets that can be purchased. Noy explains, “Companies like Lufthansa and Air Canada, for example, have no flexibility, but it is possible to add insurance products that allow flight cancelation at various costs. An airline that cancels a flight is always obligated to refund the money to the passenger, but in cases where the passenger wants to cancel, which may happen in the current situation in the country, it is recommended to book such an option.” She adds that with low-cost carriers the insurance cost is lower.
“Airline customers, mainly in the EU, reserve the right to cancel flights at any moment for a country that has a travel alert,” explains a senior official in the aviation industry. Therefore, it is less profitable for international companies to bring tourists to Israel, and this affects the amount of flights they are willing to fly to Israel. “They are not prepared to sell tickets to Israel with the right of free cancellation, which prevents tourists from coming or making bookings for the coming months. The airlines also have no incentive to respond to this because they have high occupancy anyway.”
Published by Globes, Israel business news – en.globes.co.il – on March 25, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
Source link
#Israeli #airlines #offer #flexible #tickets #higher #fares