ELY001

That is exactly how Amos Shapira and Haim Romano felt about alliances and look at what has transpired. Even LY's management, with whom I have disagreements with, highlight the fact that being shut out of alliances is one of the major factors for their loss of market share and their dire financial situation.

When you have alliances that, for the most part, act as a single giant conglomerate and exploit their vast joint route networks and economies of scale to lower fares and bestow added benefits to travelers small companies like LY cannot compete. This situation is analogous to Walmart and other large chains sweeping in and destroying small businesses as has happened throughout the United States. In this situation EL AL represents the small business and Walmart represents the alliances. Hence, why LY getting into an alliance is so critical for their survival.

NYC2TLV

First and foremost, you have to have a network and a hub before you discuss an alliance, LY doesn't have one it only has point-to-point traffic which I doubt they would want to suddenly split their profits with another carrier on those routes.

So an alliance solves nothing if you can't manage your airline.

ET wasn't invited because Star Alliance needed Ethiopia. It was invited to join Star Alliance because it offered a fabulous network in East Africa and had a good record of profits.

You need all those things before you can talk about an alliance. Just look at AI. Much better network than LY and no alliance. The reasons are that they don't have their house in order, much like LY and as such are of no value to an alliance.

At this point, I think we have more than killed this topic. ELY001 wants first and foremost LY inclusion into an alliance and NYC2TLV believes that it is never going to happen until they should concern themselves with making their sales and network profitable. Alright its settled. Case closed.

ELY001

Just because LY does not have a regional route network does not mean they will or ought to be shut out of an alliance. You are presupposing that one automatically opens the door for the other and are boxing yourself into some sort of conventional wisdom by looking at airlines from different parts of the world with different inherent situations. The AI example you mention perfectly illustrates how a regional route network is not a prerequisite to attaining alliance membership but rather a starting point. It also illustrates that there is no one set criteria for alliance membership and each situation is viewed in light of a plethora of issues specific to the petitioning member airline.

In an age where everyone has an airline mileage accrual credit card and expects to be able to use their miles across a network of airlines, and/or attain reciprocal mileage/status/benefits accrual across an alliance along with utilizing their vast schedules, the fact remains that LY will never be able to grow market-share nor build a more effective network unless and until the company gets into an alliance and revamps Matmid to where it will be attractive for both leisure and high yielding business pax, through, in large part, tapping into the alliance route network. You can have the most talented sales staff on the plant, but if your product offering is sub-par there is very little the sales staff can do but try to sell enough for the company to limp along, and that is not the sort of existence I want for EL AL and her employees. The Walmart visa vie small businesses analogy I highlighted in my previous post illustrates the importance of alliance membership to EL AL and all small carriers which is why one of the first initiatives Shkedy took as CEO of EL AL was the creation of a fourth alternative alliance. Unfortunately, nothing serious materialized out of that effort.

Again, I have devised a multi-dimensional strategy for defying conventional wisdom and getting LY into an alliance. The history of Israel is one of defying conventional wisdom, so EL AL's future success can and should be based on the same.

You're right, we must agree to disagree on this topic. You believe EL AL's only bet is to focus on sales and internal improvements and I believe alliance membership is symbiotic to sales increases and internal improvements. In essence my strategy is an all of the above approach.

Case closed for now

ELY001

I have discussed how LY can build a network and a hub at TLV in previous threads. I discussed how EL AL should capitalize on East/West traffic (between USA/Europe and the Far East) as well as expand regional services into Jordan, Egypt, Turkey, Greece, and the Balkans thereby turning TLV into a hub. I also discussed how inherent in this approach would be the creation of streamlined security protocol that is less intrusive yet nevertheless is as effective as the current security regime.

Again, I believe the issues we discuss are symbiotic to one another and you cannot isolate and tackle each of them individually; there needs to be an all out approach.

N830MH

Will LY restore the category 2 from FAA status? I wasn't sure about this one. I though LY say that they want to restore the category 2 again? Can LY will expanding more specific new route & orders a brand new aircraft as well.

ELY001

The FAA category status had nothing to do with EL AL. Israel as a country was downgraded from Cat I to Cat II because of deficiencies in civil aviation infastructure and protocol. This downgrade, in turn, prevented all Israeli civil aviation companies from expanding services (inc. codeshares) directed at the United States. Thankfully, Israel was recently restored to Category I status and thus EL AL has no regulatory restrictions upon it with regard to expanding services and codeshare arrangements to/from the United States.

FlyAO2

LY had initially cancelled MIA-TLV during the period of time where fuel prices were out of control. It was just too expensive for them to fly the 767. After cancelling the flight, TLV got downgraded to Cat II.

That prevented LY from reinstating the route when fuel prices went down, even if they wanted to.

craz

While this was true and AA made it known (probably due to what TW owed) that when it was taking over TW it wasnt buying or taking over its Rights to TLV

However the Courts in Israel said they dont accept what AA did and should a AA plane land @ TLV it can be held and sold off if AA doesnt pay up on TWs debts.

Until that ruling is changed and AA is promised in writting that the new AA will not be held liable for the Old AAs or TWs debts, I wouldnt be holding my breath waiting to see a AA plane landing @ TLV. Or if they reach an agreement on the amount to be paid and some funds start to trickle in.Otherwise be prepared to see the PHL-TLV flight going bye-bye as well , since it will be AA and no longer US

ELY001

Craz,

This is exactly the point I was making earlier. It does not matter what the American courts have ruled. Israel is a sovereign and independent nation. Since Israeli Courts have ruled that AA is liable for TWA's debts to its former TLV employees, then should AA fly a plane to TLV or attain some asset in Israel, the judgement would attach to the asset until either AA pays what it owes per the Israeli Court ruling or the asset is sold to satisfy the debt.

With the upcoming merger with US, AA now has to make a choice: pay up or get out of the market and expand the codeshare agreement with LY. My bet is that they will pull US out.

craz

And unless theres some sort of reduction in the amount owed I cant see Parker paying it off. AA could have 10 flights a day, its not the Rev that counts but the profits and it will take yrs of profits to fully pay off the debt left by TW and % that has been accuring.

I think US will continue for now to fly PHL-TLV but once they legally are 1 company Bye-Bye.

NYTA

If I were an enterprising Israeli lawyer, I'd call Doug Parker and suggest he hire me to help negotiate this because I'm sure there can be a reasonable settlement.

craz

Id think youd have a better outcome with the Greeks,French or Italians.Then again it will be the same All or Nothing.

The lawyer will end up with more then each person or company will. Unless each person will end up with a substanial amount why should they settle.

Then Im sure LY is all even thou they have a code-share with AA, the less carriers flying in = more passengers on LY at least thats probably what they think, especially if MIA or ORD will be started up again both are AA major Hubs

ELY001

Why should the workers settle for anything less than the full judgement amount plus interest accrued over the last decade or more since said judgement was entered? What TWA and then AA did was obnoxious, disrespectful, and unethical. I am also sure that TWA/AA did not treat workers at their other foreign stations with this level of contempt.

TWA/AA had over a decade to settle this debt in good faith and they did not. Hence, if they want to continue flying to TLV they should either pay up or pull out. In the alternative, they could chance it and fly one of US's A330's post-merger into Ben Gurion. It would be interesting to see how the Israeli government impounds that a/c and then auctions it off to settle the debt.

Indelaware

Because of geography, it is unlike that TLV could become a hub. US-far east traffic generally goes trans-pacific. Europe-far east is non-stop and with some connecting in Turkey & the GCC. LY would have to do significant investment in aircraft and services to compete with EK, EY, & TK, QR. Yes, they could peel some traffic off from AI, GF, & WY, but they don't have much of the market even put together.

Not that I expect it, but it would be interesting if AA operated an aircraft where frame, engines, and interior, etc. were entirely owned by a third company and leased to AA. (Of course, AA isn't going to fly any equipment into TLV without having Israeli approval.)

ELY001

As it currently stands there is virtually NO connecting traffic through TLV on LY or any other airline. My idea is to develop such a market. I am not saying nor thinking that it could compete with Dubai, but it is a market that can and should be cultivated. The large O&D market between TLV and the far east coupled with a small and steadily growing east-west traffic (perhaps even a kangaroo route from TLV) would enable LY to increase frequencies and generate significantly more revenue than it does.