El Al's flights to the far east are only profitable because they have a monopoly on those routes. If the government didn't allow codeshares to Bangkok with Thai and to PEK with Air China, and the foreign airlines actually had to fly those routes, I believe you'd see much lower prices. Last year I flew to HKG in Y and it was $1300 on AF vs. $2,400 on LY. Worth a few extra hours of my time, I'd say.

I also believe that the prices are unreasonably high to MAD and ZRH because of the government sanctioned duopoly codeshares there. I for one can't wait for the EU open skies agreement to happen.

Personally, however, I wonder what would happen if a European airline wanted to fly to the far east with a stop in Tel Aviv? If one of the European governments had some balls they'd tell the gulf states that if they didn't allow overflight, then they wouldn't give reciprocal landing rights. That would change things in a hurry. I also wonder if this would be allowed under the perpetually delayed open skies treaty.