First Israeli commercial flight to UAE today signals vastly enhanced access to Asia and Australasia

Until today, Israeli travelers heading east for business or pleasure had very few choices — a mere handful of flights to India, Hong Kong, Bangkok, and Seoul, none of them operated on a daily basis even before the pandemic.  Even worse, flights on Israeli aircraft had to waste hours' worth of fuel and time detouring around Saudi airspace.

As I write, the game-changing first-ever commercial airline flight of an Israeli airliner to the United Arab Emirates, from Tel Aviv's Ben Gurion Airport to Abu Dhabi, is about to take off, carrying a delegation of Israeli and American officials and presidential adviser Jared Kushner.  The Boeing 737-900 aircraft chosen for the flight is equipped with Israel Aerospace Industries' Skyshield anti-missile system, unlike El Al's Boeing 787 fleet, and was painted with the word "peace" in Hebrew, English, and Arabic [i].

The flight plan filed indicates that it will be the first Israeli commercial flight permitted to overfly the airspace of the Kingdom of Saudi Arabia, itself a hugely important move.

Twitter screen grab.

Once the pandemic eases and semi-normal airline traffic resumes, Israeli travelers will find travel not just to the UAE, but to the entire world east of it, much more convenient, and almost certainly much cheaper.  Abu Dhabi and Dubai airports are both gigantic airline hubs (Dubai was the biggest pre-COVID international airline hub in the world), where millions of passengers a month changed planes on their way to hundreds of destinations served by the flag carriers Emirates and FlyDubai, based in Dubai, and Etihad, based in Abu Dhabi.  Once normal travel resumes, Israeli passengers almost certainly will have the choice of multiple departures per day to these hubs, from which virtually every major city in Asia, Australia, and New Zealand can be reached via a one-stop connection.

Business travelers greatly value the option to change plans at the last minute, and the offer of multiple options per day for travel, because the demands of their business can change at the last minute, perhaps to extend negotiations or respond to late-developing opportunities and threats.  The UAE itself is a major exporter of capital and prioritizes hi technology investments, a field in which Israel is second only to Silicon Valley.  The opening of this doorway will make it much easier for business relationships between the two countries to develop and be managed, and that will mean much more investment and commerce, including two-way tourism.

But it will be the enhanced ease of access to the major cities of India, China, Southeast Asia, Northeast Asia, and Oceania that is likely to have the greatest economic impact in the longer run.  These are the collectively the biggest economic bloc in the world, and now businesses will be able to easily explore and develop opportunities.

Until now, all of the direct routes from Israel to the east have been monopolies, with only a few flights per week.  But now, there will be fare competition on travel through the hubs, and that will mean cheaper airfares.  Etihad and Emirates in particular are fierce competitors and have been known to cut prices to attract travelers from each other and other airlines.  This will help tourists, but also means that smaller businesses can afford exploratory visits to potential investors or markets...outbound and inbound to Israel.

The Israeli delegation arriving today in Abu Dhabi will negotiate a bilateral airline agreement setting conditions for flights between the two countries.  Ironically, it will be the Emirati carriers who will benefit the most, because they can offer access to the billions of people who live to their east.  El Al and Israir, the two Israeli international carriers, will have to terminate their flights in the Emirates, unless onward flights (fifth freedom rights) are part of the agreement, something that would be of little value to the Israeli carriers, whose costs and cabin service standards are not competitive with the Emirati carriers.  Were Emirates and Etihad granted fifth freedom rights to, for instance, fly from Dubai to Tel Aviv and onward to Europe or North America, El Al's survival would be questionable, for they enjoy lower costs, and their cabin service standards are among the highest in the world.

There is one big loser: Turkish Airlines.  Savvy Israeli travelers have long used its hub at Istanbul for access to the rest of the world not directly reachable from Ben Gurion and to enjoy lower airfares and better cabin service.  For westbound traffic, Istanbul will remain a logical choice, because the UAE would involve wasting hours backtracking in the wrong direction.  But Turkish Airlines is likely to lose considerable eastbound traffic.

One other smaller loser will be Royal Jordanian Airlines, which has long attracted Israeli travelers to take a bus to Amman Airport and fly outward to the destinations accessible from that smaller hub.

One lesson of the last half-century or so is that access to an airline hub makes a huge difference in economic development.  Atlanta and Dallas Fort Worth are two major metro areas that have grown rapidly because of the access their airline hubs offer to businesses seeking to relocate or grow.  I know of many businesses that have located in those cities precisely because they can get anywhere in the USA (and many overseas cities as well) quickly and easily.

Israelis now get second-order access to similar convenience. 

[i] Early reports are that an explosion has occurred at a restaurant in Abu Dhabi as the flight began, but it is being attributed to a gas leak.

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