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Project runway starts for UAE, Israel

Waheed Abbas/Dubai
Filed on August 30, 2020

(KT file)

Aviation sector to be critical connection in fostering economic ties

The air traffic sector - both for passenger and cargo - poses huge potential for the UAE and Israel, as the former can leverage its regional aviation status to attract more tourists from the latter, say analysts.

While the first commercial flight from Israel is scheduled to land in Abu Dhabi today, UAE airlines are waiting for the country's aviation authority to give the green light to start operations to Israel.

On August 13, the UAE agreed to expand diplomatic and commercial ties with Israel.

Newswires have reported that Israel's national carrier El AI is scheduled to make the first commercial flight to Abu Dhabi from Tel Aviv today. This flight will carry several high-profile officials including Jared Kushner, senior advisor and son-in-law of US president Donald Trump, National Security Advisor Robert O'Brien and others.

On Saturday, the UAE also abolished a ban preventing individuals and firms from the UAE to trade and deal with Israeli counterparts.

"The operation of any route requires air traffic rights and government approvals. Once those are in place, Emirates will review market demand and a range of operational factors before making any decision to start flight services," an Emirates spokesperson said in a statement to Khaleej Times.

"Flydubai follows the directives issued by our authorities. The effect the announcement has on travel will be seen with time," said a flydubai spokesperson.

In May, Abu Dhabi-based Etihad Airways made a historic first flight to Tel Aviv, carrying humanitarian aid to Palestinians.

"Although coronavirus effects will constrain near-term benefits for air travel, the UAE's air transportation sector is well-positioned to take advantage of a normalisation in relations. The UAE's two largest airlines, Emirates and Etihad, could attract Israeli passengers by leveraging their hub status," said Thaddeus Best, analyst at Moody's Investors Service.

"In addition to passengers using the UAE as a hub for onward travel, there may also be some demand for direct tourism between the two countries, supporting passenger traffic volumes marked by slower growth in arrivals even before the pandemic," added Best.

The normalisation of ties could increase Israeli exports to the UAE to $300-$500 million annually and UAE investments in Israel could reach $350 million a year, said Israel's economy ministry.

Mark Martin, CEO of Martin Consulting, said it is good to start with cargo, a service that can be commenced immediately.

"Cargo is an immediate opportunity and I see no reason why cargo and air freight cannot start. Emirates Skycargo and El Al can start code-sharing and there can be a lot of cargo play. Passenger air travel might be a bit of challenge and full-blown commercial flights that should take a little more time. But I hope the two countries can come together and form a good cordial connect on this," said Martin.

"When it comes down to normal flights, if the two countries begin with one flight per day, that is a good enough. Also, a lot depends on the revenue and business opportunity potential for the airlines. Initially, we are looking at mostly the commercial traders and businesses which will find added opportunity in this relationship," he added.

Martin said direct commercial flights can begin with Abu Dhabi and then Dubai, with other Northern Emirates following later. UAE airports can connect to Israel's three international airports in Tel Aviv, Haifa and Eilat.

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