Israel’s Ministry of Transport has been embroiled in a heated internal dispute in recent months, the outcome of which could affect the future of Israeli airlines as well as airfares, “Globes” has learned. In discussions held at the ministry, the Civil Aviation Authority is urging the government to withdraw from talks with Hungarian low-cost carrier Wizz Air to set up a hub at Ben Gurion Airport, due to the potential harm to Israeli airlines. On the other hand, the Ministry’s economic affairs division sees the move as an opportunity to increase competition, and cut fares. Minister of Transport Miri Regev must decide between making flights cheaper for Israeli consumers or taking steps to protect Israeli airlines.
In May, Regev declared her plan to promote the opening of a foreign airline hub at Ben Gurion Airport. Such a base of operations would allow a carrier to establish Israel as the start and end point for flights – in other words, no longer round-trip flights, but the presence of aircraft and crews in Israel, which allows the company to operate more flights and benefit from valuable slots (popular flight and takeoff times that are awarded to companies according to the airport’s capacity), and thus establish a bigger foothold in the domestic Israeli market.
Currently, Israeli carriers have a comparative advantage in that their aircraft are based in Israel and can take advantage of the first and last slots of the day, which are preferred by passengers. If Wizz Air were to establish a base in Israel, it would be able to enjoy the same terms, and become a dominant player during peak hours.
While Israeli airlines have an advantage in slot allocation, they are subject to regulations that do not apply to foreign companies, including strict wage agreements and security arrangements and coordinating with El Al, which is also the security services provider. If Wizz Air were to open a hub in Israel and ask to register as an Israeli company, the same regulations will also apply to it. However, industry sources believe there is no obvious reason for Wizz Air to do so. Moreover, during talks with Wizz Air, it became claer that it has no plans to agree to open its hub at Ramon Airport near Eilat, but only at Ben Gurion Airport, and it does not intend setting up an Israeli subsidiary.
Alternative plan
Although she presents the move as such, this is not Regev’s initiative. Wizz Air has been pressing the Ministry of Transport for many years about setting up an Israeli hub, but they have been consistently denied. Civil Aviation Authority head Shmuel Zakay has made it clear in the talks that he opposes the establishment of any such hub. He insists competition would be unfair because a foreign airline would enjoy all the benefits of Israeli aviation without bearing the costs. Zakay says this situation does not produce any incentive to establish additional Israeli airlines, such as TUS, and during a low point for air travel to and from Israel the hub would be set up at the expense of other airlines.
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The Civil Aviation Authority has proposed an alternative plan, which would require Wizz Air to establish an Israeli subsidiary, just as EasyJet has set up subsidiaries in Austria and Switzerland, and Wizz Air has in Abu Dhabi. In addition, Zakay warns that it is not feasible to allow only one airline to set up a hub in Israel, because after this window is opened, there will be no justification for refusing other airlines, which would create an unbearable burden on Ben Gurion airport’s infrastructure.
The Israel Airports Authority (IAA) acknowledges the advantages of the move, but also cites major risks. The IAA expresses concern over dependence on a foreign carrier in times of emergency, and recommends setting up an inter-ministerial team supported by an international consultant to examine the implications.
On the other hand, the Ministry of Transport economic affairs division has expressed enthusiastic support for the move. They see it as an essential means of increasing competition, cutting fares, and improving service in an industry that has been hit by operational problems in recent years. The division recalled that Israeli airlines claimed that they were close to collapse before the Open Skies reform (an agreement with the EU in 2013), yet the reform made them become more efficient.
The economic affairs division says the security expenses of Israeli airlines are already almost fully subsidized by the state, and there will always be a market that will prefer an Israeli company due to the feeling of security and for kosher food and Sabbath reasons. They reject the claim of a lack of capacity at Ben Gurion Airport, and say Israeli companies receive additional capacity from time to time, especially now that slots of Turkish airlines that formed a major part of Ben Gurion Airport’s operations before the war have been relinquished. They claim also that the security situation in Israel reflects an extreme situation and that long-term regulatory policy cannot be based on it.
The department also rejects comparisons to other subsidiaries, claiming that these are models that were spawned for political reasons such as Brexit or government control in the UAE, and that there is no justification for demanding Wizz Air establish an Israeli subsidiary. The fundamental question, in their opinion, is whether Israeli passengers should continue to subsidize the inefficiency of local airlines in order to protect them.
In any case, amid the pressure of elections over the next year, Regev will soon need to decide on the matter. She will be eager to please the voting public, but will come under huge pressure from the Israeli airlines and their workers’ committees. In any case, a delegation from Wizz Air is expected to arrive in Israel in the coming weeks as the moment for a decision fast approaches.
The Ministry of Transport said, “The Ministry of Transport is examining the issue while considering all professional and economic aspects, including the impact of the move on consumers, on fares, on competition in the industry and on the activity of Israeli airlines. A decision will be made after a thorough examination of the data, in cooperation with all relevant parties.”
Published by Globes, Israel business news – en.globes.co.il – on August 4, 2025.
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