American Airlines to discontinue direct flights to Tel Aviv
American Airlines’ Philadelphia-Tel Aviv route will see its final flight on January 5, 2016, following the private airline’s announcement to bring the route’s six years of operation to an end. According to the Israeli Airport Authority, American’s Philadelphia-Tel Aviv route has seen 95,000 passengers this year , a 2.7 percent increase from the same time last year.
Despite this, the airline cites financial reasons for discontinuing the route.
“At the six-year mark, we have yet to turn a profit on this route,” said Rhett Workman, American’s managing director of government and airport affairs. “We really tried to make a go of it. We were hoping that with the merger” of US Airways and American in December 2013, “and, more recently, with the significant reduction in fuel prices, the route would turn to the black. Unfortunately, that has not been the case.”
American Airlines Management reported $20 million loss on the route last year alone. Even after looking at “every single option with every single aircraft [they] have,” American does not anticipate restarting a service to Tel Aviv in the near future.
The announcement has been met with both surprise and skepticism, as it came with no advanced warning to Israeli airlines or officials. After merging with US Airways, which had been serving Israel since 2009, American Airlines sent a team of executives to Israel with a vow to expand the Philadelphia-Tel Aviv route and add more US destinations.
Richard Bendit, president of the Philadelphia-Israel Chamber of Commerce, told Philly.comthat the initiation of the Philadelphia-Tel Aviv flight in 2009 was “heralded as a ‘game-changing’ move, expected to boost both commerce and tourism between Israel and the Greater Philadelphia region.” An estimated 25%, or $5 billion, of all Israeli exports to the US pass through the Philadelphia region.
In a report on American’s decision, Haaretz cites an anonymous industry source to explain this discrepancy. “Profitability wasn’t the problem,” they said. “The past year hasn’t been easy for the airline industry in general, but that’s far from saying that the route wasn’t profitable. No one would have operated a money-losing route for so many years.”
Instead, the industry source attributed American’s decision to their membership in the OneWorld global alliance. OneWorld includes member airlines from various Arab and Muslim-majority countries including Royal Jordanian, Qatar Airways, and Malaysia Airlines. American was one of the founders of OneWorld, which is now the third largest global alliance, after Star Alliance and SkyTeam, in terms of passengers flown. These alliances facilitate smoother connections between member airlines and coordinated frequent-flier benefits.
Despite Israeli efforts to influence American Airlines otherwise, the last flight from Tel Aviv is set to return on January 5, 2016. Following this, the route’s 19 Israeli employees will be terminated and passengers with reservations after this date will be redirected to other airlines or refunded by American.