American Airlines Taking Israel’s Biggest-Ever Subsidy for New Dallas – Tel Aviv Route

Back in early May I wrote that American was looking to re-start service to Tel Aviv with a Boeing 787. They announced plans to do so from Dallas Fort-Worth last week. The airline intends to offer three-times weekly service beginning September 9, 2020 – so more than a year away.

Unlike most other flights between the U.S. and Israel this one isn’t focused on the Jewish market or even directly the tech sector (though there’s tech in Texas to be sure). Instead it should draw evangelical tourists, and should be the preferred flight for travel from places like Waco and Tulsa.

American’s CEO Doug Parker called visiting Israel, when the route was flown from Philadelphia by legacy US Airways, “one of the highlights of my life” in a meeting with employees.

Now we know a little more about what may have put American’s decision to re-start service, after losing money on their Philadelphia route, over the top: the largest subsidies for a new route in Israel’s history (HT: Dan’s Deals)

The world’s largest airline, American Airlines , will receive a € 750,000 grant from the Ministry of Tourism for the opening of a new line between Dallas and Tel Aviv . The money will be transferred to the company at the end of the first year of operation.

american airlines boeing 787-9 at LAX
American Airlines Boeing 787-9

Scheduled US – Tel Aviv currently includes,

  • New York (JFK and Newark): El Al, United, Delta
  • San Francisco: El Al, United
  • Washington Dulles: United
  • Los Angeles: El Al
  • Boston: El Al
  • Las Vegas: El Al
  • Orlando: El Al
  • Miami:

    An $841,000 subsidy for thrice-weekly service won’t make the route work on its own. However it’s more money than Israel has ever offered for a new route, and certainly won’t stop American from complaining that subsidies should be for me, but not for thee.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This seems like a political move as much as an economic one. As Gene says, this isn’t very much money per flight (less than one business class ticket). What it does do is bring the type of American that the current Israeli government wants to court to Israel. Israel’s primary support base in America are conservative evangelicals. This flight works to bring them to Israel and help solidify their support.

  2. This certainly explains how this flight wound up at DFW! It otherwise didn’t make any sense to me. I’m not a fan of governments subsidizing businesses (it’s generally a waste of taxpayer money), but if I’m a business, I’m happy to take the money. And, of course, this is not like Middle East Airline Money. We’re talking six-digit money here. The ME3 get at least ten-digit annual subsidies!
    The question I have is that, at the end of one year, does this route ALSO switch to PHL, where it probably belongs?

  3. @chopsticks : yea they’re using the same old playbook again

    (1) claim free money via subsidy
    (2) when it runs out, say the obvious that PHL is their Atlantic hub
    (3) 3 years later, say PHL failed before and still failed this time

    The argument that JFK is inadequate for AA to TLV is absolutely ridiculous. The local market alone is so huge it’s orders of magnitude larger than many major hubs. The connections argument for PHL is the convenient one used by the defeatists :

    – when it launches, claim infinite connections and zero nonstop competition
    – when it fails, claim PRASM is trashed into the toilet because it’s too heavily dependent on connections.

    The uniqueness of the NYC-TLV market is on par with that of MIA-GRU, SIN-SYD, and TYO-HNL – You either serve it nonstop, or don’t even bother.

    rinse and repeat

  4. Methinks HenryLax doesn’t really understand what “orders of magnitude” means – no, NYC is not at least 10x bigger than any other MSA. Latest stats have 20MM for metro NYC and 7.5MM for the DFW Metroplex. So NYC is *bigger*, but of course already has all the existing El Al / United (best airline ever! all others are major losers!!!) flights.

    Smart move by AA overall – non-served region + serving a different target population.

  5. @ henry LAX — There is an argument that AA could serve TLV from JFK. It is, obviously, the biggest USA market to Israel. AA says their JFK flights are designed for market with high local traffic. And fares to Israel tend to skew to the high side (you don’t get off-season rates in the $300s like you do to Europe from NYC). That said, I doubt we’ll see it. For AA, PHL just makes more sense. They have feed in PHL from just about every major city in the USA. They’d have no competition. PHL is currently the largest Jewish community in the world without a nonstop flight to Israel. And there are places in NJ — like Lakewood — where there are a lot more Jews where flights from PHL are at least as convenient as flights from EWR. So my guess is the AA Israel flight returns to PHL. Or if, somewhat surprisingly, the DFW flight works, they’ll add PHL service at some time to the mix. I think JFK is a longshot.

  6. That’s a good investment, the right wings nuts who will fly over will bring a lot more money in to further the Zionist cause anyway.

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