Visair will not establish a base in Israel after the explosion of the negotiations

The negotiations forEstablishing an activity base of the low-cost Visair company in Israel ran aground, after months of negotiations between the company and the Ministry of Transportation. The office attributes this to the fact that the company is not returning to operations in Israel, but in practice these are circumstances that were known in advance to both parties.

Last week, Transport Minister Miri Regev spoke with the company’s CEO Joseph Waradi andAsked to examine the advance of the return of flights to Israelalso in a graduated manner. The appeal was intended to encourage the company to present a commitment to the local market in preparation for the establishment of the base, but in practice did not lead to a change in its position.

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In the background, the European Union’s Air Safety Agency, EASA, Last night extended her recommendation European airlines to avoid flights to Israel at least until May 12. However, even before the last extension, a similar recommendation was in force, based on which Visayer repeatedly postponed her return to Israel. In previous cases where such a recommendation was published, the company did not return to operations, and in practice it is not customary for European airlines to act contrary to this type of directive. Although it is a non-binding recommendation, it has significant insurance and operational consequences, so most companies choose to adhere to it.

The Ministry of Transportation acknowledged this throughout the period, and even continued to promote the move to establish the base at the same time as the company’s lack of activity in Israel. The ministry even explicitly stated that the mere non-return of Visair to Israel at this stage is not expected to blow up the negotiations considering the normal periods

Other alternatives are being considered

The development comes after significant steps have already been taken to enable the establishment of the base. Among other things, the state approved Visair to land planes in Israel, a move that provides an important operational advantage and allows it to operate similarly to local companies during peak hours. Now, even if the contacts with Visair have stopped, the very approval to ground planes in Israel leaves the door open for another foreign low-cost company that can take advantage of this and establish a base of operations in Israel. The Ministry of Transportation is examining other alternatives, which do not include Visair, with the aim of promoting the entry of a foreign player who will increase competition in the market.

We will remind you that recently there has been a change of government in Hungary, which may affect the economic and regulatory priorities towards local companies operating in the international arena. Such a change can manifest itself in a different approach to risk management, to aviation policy and to relations with security-sensitive markets, thus influencing, even if indirectly, the pace of the company’s decision-making regarding the expansion of its operations in Israel.

The move to bring Visair to establish a base of operations in Israel was initially met with broad opposition from the Israeli airlines. The opposition on the part of the workers’ committees in the industry manifested itself in a significant conflict surrounding the consequences of the move on competition and jobs, to the point of threatening to shut down the National Aviation Administration shortly before the start of Operation Hagar’s Roar. The workers’ committees in the aviation industry have significant public weight, especially in the period before elections. In this reality, they may influence the environment in which decisions are made in which the Minister of Transportation Miri Regev also works.