Minister of Finance Bezalel Smotrich and Minister of Foreign Affairs Gideon Saar announced at the weekend that they were moving ahead with direct flights between Israel and Argentina. But the route will attract so few passengers that even just twice weekly flights will need government incentives, and one travel industry source said they might end up making other, more indirect routes, such as to the US, more expensive.
The explanatory notes to the ministers’ proposal say that the step has been taken “due to the lack of direct flights between Israel and Latin American countries and due to the existence of a political interest in strengthening ties with Argentina, inter alia in the light of its standing together with Israel in the international arena, and in the interest of developing economic relations.”
Thus, the Ministry of Economy will establish a mechanism that will incentivize airlines to operate commercial flights between Israel and Argentina with a frequency of two weekly flights. “As a general rule, the state does not support certain entities for profit in order to improve their profitability,” it was written. “According to the position of the professional officials in the Foreign Ministry, there is an important political interest in operating flight routes to Argentina.”
Ministry of Transport opposes
The Ministry of Transport opposes the proposal, and a letter from Civil Aviation Authority Director Shmuel Zakay, obtained by Globes, sheds light on the reasons for this. According to Zakay, the only Israeli company that meets the definitions for operating such a flight and owns a wide-body aircraft is El Al. The proposal would incentivize it “to divert a wide-body aircraft, which is a limited and expensive means of production, from a route in demand with the public (the Us) in order to operate a subsidized route. This directly harms the public,” he wrote.
According to him, “A loss of capacity on a route to New York due to the diversion of the plane will result in an increase in fares on this route in order to operate a route that has no economic justification. Furthermore, the diversion of the plane from operating the route to the US will exacerbate the shortage of seats.”
Zakai stressed that market intervention would harm airlines that transport passengers on connecting flights to Argentina, and that there is an air connection with South American countries in a “network of connecting flights with several competitors as is customary in destinations that do not have an economic justification for a direct flight.”
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Zakai proposes a new bilateral agreement with Argentina, which would allow airlines to operate such flights at their commercial discretion. The industry fears that in order to fly a plane without economic justification, passengers to high-demand destinations in the US will pay the price in order to please the Argentineans.
No response has been forthcoming from either the Ministry of Finance or the Ministry of Foreign Affairs.
Published by Globes, Israel business news – en.globes.co.il – on June 9, 2025.
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