rafi2k6

I saw that, but I think it’s hogwash to be completely honest with you.

LY’s cost basis is probably 50% higher than their competition because if security requirements. They will never be able to offer low fares and turn a profit, much less open enough “east-west” connections to attract people to fly from London to China with them.

Come on, LY has a SMALL wide body fleet and a SMALL narrow body fleet. Combined with their high operating costs, political challenges and physical setup of their hub airport- this is nothing but a pie in the sky idea.

The demand for flights to Israel is there, they need to figure out how to tap into that.

Even if they turned TLV into a transfer hub, can you imagine the gong show that would be?

LY’s key to success will be to improve reliability, customer service and IT. Once they’ve got those basics down, then let them start dreaming of competing with EK, TK, etc

simba8

Funny enough, just last night Issued bonds: The Airports Authority raised NIS 1 billion- "The raising was made in accordance with government decisions in the field, which will enable the Authority to implement the development plan For the aviation needs of the State of Israel.
Translation- they will be expanding the airport.
Can't imagine how long that will take....

rafi2k6

I believe there is one more concourse that can be built on the current infrastructure. Could that be what they are referring to?

simba8

not sure- i guess we'll; have to see

GUWonder

I don’t know what LY’s keys to success could be, as I tend to think of airlines as generally bad business, at least in isolation, for long-term private investors.

India/DEL used to be a lot more like Israel/TLV with international-to-international transits; but even India/DEL managed to dip their feet more into the international transit game and did their DEL development/expansion plan to build up DEL to handle a bit more and better that which was done by almost no non-Indian/non-Nepalese international arrival passenger on most days at DEL: international-to-international transit beyond the Indo-Nepal area. Between the interests of the management of the flag carrier and a government interested in putting on more of a show of opening up to the world, lipstick+pig for transit purposes may be more the order of the day instead of hogwash when it comes to airport development/expansion plans. El Al and Israel may attempt some of the same as India/DEL anyway with the TLV development plan — if not now, then perhaps later. Better chance of this than of pigs growing wings to fly.

rafi2k6

The markets are completely different. India is not affected by nearly as many overflight bans, nor do they have the massive security or political constraints that Israel / TLV does.

Could TLV see a small amount of transfer passengers? Sure, maybe to places like DXB, AUH, CAI, SSH, ETM for West to east passengers.
And maybe Europe or North America for East originating Pax, but the cost will never be truly competitive, the math doesn't allow it.

Therefore, I don't see this as the way forward for them. They need to focus on their base, the core business and understand their place in the market and stop trying to punch above their weight class.

GUWonder

Focusing on its base has kept LY in a state of being the same kind of basket case business case as has happened with other legacy flag carriers in the international marketplace.

The business should be trying to claw for every bit of additional business — at a price equal to or above its marginal variable cost — and maximizing fleet utilization, and that may well mean that less should be off the table with expanding international transit capability and cross-airline partnerships in the years ahead than remains the case for the present and the past.

The latest development with LY raising money by effectively selling an interest/option in Matmid seems to be a sign that LY is willing to try new things for itself: https://www.reuters.com/world/middle...an-2022-03-15/

elal767

Three quick thoughts on this -
1. The silver lining here is that they’re actually willing to reevaluate routes that have been around for a while and get rid of them if they don’t make sense financially.
2. Getting rid of WAW makes sense as they were getting killed by the competition. BRU is an interesting one, mainly because their key competitor on this route is hitting them on the premium side of things but not on the Y side of the equation.
3. YYZ is a strange one, for sure. Keep in mind that 98% of security expenses are paid for by the government (thus, our taxes, you’re welcome), so the question of personell implications etc. shouldn’t really be a factor here. If it’s a price sensitive market with *A providing both direct and decent connecting flights, it might not be a priority in comparison to El Al’s other North America routes.