EU decision to bar entry to Israeli tourists is setback for ailing travel industry – Business

Israelis who had been counting on a European vacation after Prime Minister Benjamin Netanyahu promised to restart air travel August 1 and the beleaguered travel industry that was hoping to capture some summertime business will both have to wait.

Due to the rising rate of coronavirus contagion in Israel, the European Union has decided not to include Israel in the list of countries whose nationals can travel to EU countries, the Ministry of Health’s coronavirus information center said on Tuesday.

Over the last two weeks, Israel has registered 3,868 new confirmed cases, a rate of 43 per 100,000 population and 2.5 times the threshold level set by the EU.

The decision came as thousands of travel industry workers staged protests in front of the Finance Ministry building in Jerusalem. They were angry not at the EU ban but at what they said was the government’s failure to deal with the industry crisis.

They called for the government to set a firm date for renewing air travel and to provide grants and aid to the sector, which they said employs 40,000 people directly and 150,000 indirectly. El Al, the biggest of Israel’s three airlines, has been locked in a dispute for weeks with the treasury on an aid package. Meanwhile, it has suspended flights at least until the end of July.

With the deadlock over aid, three El Al cargo flights – the only kind of flying the carrier is doing now – scheduled for Wednesday were poised to be canceled amid a worsening labor dispute with pilots. If the flights are cancelled, management said on Tuesday it would put the remaining 110 pilots still on the payroll on unpaid leave.

Sources said the dispute is over alleged infractions of agreements over pilot assignments. But behind the scenes, the pilots union is hoping that Tami Mozes Borovich will lose control of El Al as part of a bailout and be replaced by a controlling shareholder with the capital to invest in the airline.

The pilots’ workers committee denied it is striking and blamed management for the problem by violating agreements.

“El Al, Israel’s flagship carrier, needs capital, either from exiting shareholders or others who can lead the airline successfully through the coronavirus crisis,” the committee said. Management said it was acting to cut costs in line with the requirements of the impending bailout plan.

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An El Al Dreamliner aircraft lands at Ben Gurion International Airport, December 22, 2019.Credit: יוחאי מוסי

Stunning reversal

The rise in coronavirus cases and Israel’s placement on the EU’s “Red List” of countries that haven’t succeeded in containing the pandemic mark a stunning reversal of the situation only a few weeks ago. Then, Israel looked to be well placed for a renewal of international tourism, compared to most of the world.

Uri Sirkis, the CEO of Israir, a smaller rival of El Al’s, said that as long as the date for restoring air travel remains ambiguous and the Health Ministry requires returning Israelis to go into quarantine, no one will order tickets or tour packages.

As a result, he said, the Israeli tourism industry has declared 2020 a lost year.

“Aviation is in the hands of regulators. If the Health Ministry says that we can only fly in another year and the Transportation Ministry sees airlines as a strategic asset, then the government has to agree on a program of financial support and state-guaranteed loans so that we can survive for another year,” Sirkis said, warning, “If they can’t it means the end of Israeli aviation.”

He contended that Israel could get itself on the Green List relatively easily if it tried to.

“Yesterday [Sunday] in England they confirmed 901 new coronavirus cases and more than 100 people died, but they still announced more easing of restrictions. The concept of closing the borders so you can lower the contagion rate has collapsed. The fact is the rate is rising even with quarantine directives,” he said.

The solution is risk management until a vaccine is developed, not shutting down international travel. “Everyone recognizes that the summer season is critical for reopening tourism and for the livelihoods of the people who work in it. If you shut down the summer, you are imposing an economic death sentence on a lot of people,” Sirkis said.

Ilan Fluss, the head of the economics unit at Israel’s Foreign Ministry, admitted that he was a “little frustrated because the contacts that we had had for more than two months with EU countries have been frozen.” That said, they have not been ended altogether.

“The EU decision is due to epidemiological data. For the past two weeks we have clearly not met the criteria they set. But they made it clear to us that this is a dynamic and changing list. That means that once the data get better, there won’t be an impediment to renewing air travel,” he said.

Meanwhile, however, there will be no European vacation or business trips this summer for Israelis.

Until its coronavirus numbers began climbing, Israel had received offers from several countries to restore air connections and tourism via bilateral agreements between countries designated “green” because the contagion rates are under control. Those countries included Greece, Cyprus, Georgia, the Seychelle Islands, Uzbekistan and Montenegro.

Fluss said talks had also been underway with Eastern European countries such as Hungary, the Czech Republic, Lithuania, Slovenia and Austria – all countries that had low rates of contagion when the process had begun.

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Greek Police wearing face masks check the documents of the passengers, Eleftherios Venizelos International Airport, Athens, June 15, 2020Credit: Thanassis Stavrakis,AP

Clear political and economic interests

Cyprus and Montenegro were the first to react to Israel’s rising coronavirus numbers. Last week they lowered Israel from their A list of countries to their B list, meaning arriving Israelis would be required to be tested for the virus before they board a plane.

“Countries like Greece and Cyprus have a clear political and economic interest in restoring tourism links and felt they wanted to move forward. They are among the countries physically closest to Israel and Israelis are good tourists,” he said.

Fluss said an inter-ministerial team was working to develop an international “purple tag,” the Israeli designation for businesses that are meeting rules for reducing the risk of coronavirus infection.

“There are technical problems – no one wants to fill out a health declaration by hand, so we’re in the process of digitalizing it. Also, the issue of [travel] insurance is on the agenda, because insurance companies will need to provide policies designed for the coronavirus. We’re committed to renewing air travel as soon as possible,” he said.

Today most insurers aren’t offering travel coverage at all, but they are working on pricing models that take into account the added risk of COVID-19.

The Tourism Ministry is unhappy with the way these bilateral talks are being conducted. “The Tourism Ministry has almost no status in these bilateral agreements. The one who’s responsible is the Foreign Ministry while the Health Ministry sets the guidelines, said one official who asked not to be named.

“The problem is these guidelines change from day to day. We thought we were past this, but it seems we’re not. The EU determined what number of cases of infection in the population is acceptable and we don’t meet it right now – so air travel won’t reopen this summer. So what are we going to do in the meantime? We’re working on tourism infrastructure in Israel and keeping marketing channels with other countries open,” the official said.

With reporting by Yoram Gabison.

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