American Airlines announced last week that they would resume flying to Israel with the launch of 3 weekly flights between Dallas and Tel Aviv starting next September.
I noted then that Dallas was an interesting choice as it has by far the smallest Jewish population of any other North American metro area that has year-round nonstop Tel Aviv service.
Now we know more about why Dallas won out over other options. YNet reports (in Hebrew) that Israel’s tourism ministry will award American 750,000 Euros, or about $840,000, for operating the route for at least 1 year.
Israel has been known to subsidize new routes and 750,000 Euros is the largest subsidy offered. El Al recently received 250,000 Euros for launching Las Vegas-Tel Aviv service, though that only operates once per week.
American’s hubs in Chicago, JFK, Los Angeles, and Miami already have or will have existing service and would not qualify for a subsidy. American’s USAirways predecessor flew from July 2009 to January 2016 from Philadelphia to Tel Aviv, before ending the route right after the airlines merged.
USAirways’ then president Scott Kirby, who moved to American before jumping ship to United, called the Philadelphia to Tel Aviv route among the most lucrative in their system. However American said the route was not profitable and didn’t have any forecast of profitability when they shut it down. I’d assume that Israel is not in the business of subsidizing previously failed routes, so that likely nixed the chance of a Philadelphia to Tel Aviv route revival.
That left AA hubs in Charlotte, Dallas, and Phoenix as the remaining options for Tel Aviv service if American wanted a route subsidy. American’s international flights from Dallas are also more profitable then the rest of their system, so Dallas was the obvious choice.
With a small plane to fill like the 787-9, just 3 weekly flights, and the $840K subsidy, American has very low risk with this new route.
So now we know that Dallas to Tel Aviv should stick around for at least a year. I’d guess by then American will know if they want to move it to a daily flight, as United did soon after launching 3 weekly flights from San Francisco to Tel Aviv. Alternatively they may keep it at that frequency, cancel the route, or move Tel Aviv service to another hub, such as JFK, Los Angeles, Miami, or Philadelphia.
Do you think the Dallas-Tel Aviv route will last after the 1 year subsidy is paid?
HT: Rabbi Moshe Rabin