March 1, 2001
Banking on the Future
Amid recent decline in tourism, El Al buys new Boeing planes.
Tourism to Israel is slumping, but the country's national airline is betting $400 million on a liftoff.
That's the amount El Al spent on three new Boeing 777 aircraft, which were turned over to El Al on Jan. 31.
The planes, known as "Triple 7" but formally designated as the Boeing 777-200ER, are named Galilee, Negev and Sharon -- the latter not in honor of Israel's new prime minister, but for Israel's coastal plain between Tel Aviv and Haifa.
They will begin service in March on nonstop flights from Tel Aviv to New York or Chicago, as well as to London, India and the Far East.
El Al ordered the planes, whose seating arrangements and other interior features are customized to each airline's preferences, in late 1999.
At the time, El Al was closing out its best year ever, during which it ferried 3.1 million passengers to and from Israel. Projections were that El Al would raise that record figure by 15 percent during the 2000 millennium year. Until September, those estimates were right on the nose.
Then Palestinian violence broke out in late September, the U.S. State Department issued a warning against travel to Israel and expected tourism for the lucrative Christmas season plummeted 30 percent.
Tourism is now running 15 percent to 20 percent below 1999 levels.
Some of the slack has been taken up by U.S. Jewish solidarity missions and sharply higher passenger and cargo loads in flights to India, Hong Kong and Korea.
Conditions may well remain unstable for much of this year, said El Al's new president, David Hermesh, but he looks forward to a new record of 4 million passengers in 2002.
"It's been our experience in Israel that after each crisis there is a rebound, a boom in tourism," Hermesh said.
The new Triple 7 is smaller than the workhorse 747-400, carrying 300 passengers to the older plane's 416 seats. Yet the new planes have more sophisticated technology, greater fuel efficiency and overall noise reduction, and El Al promises greater passenger comfort and better service.
Behind the scenes in Israel, meanwhile, long-running negotiations continue on whether to privatize the government-owned airline, with no resolution expected until 2002.
If privatized, El Al is likely to try to operate flights in and out of Israel's Ben-Gurion Airport during Shabbat, as foreign airlines do.
Before 1982, El Al operated worldwide flights on Saturday. The exceptions were the flights to and from New York, which carried a large number of religiously observant passengers.
Tom Tugend recently participated in a three-day seminar sponsored by El Al, Boeing and Rolls-Royce.