Published: May 7, 2025
Israel’s aviation sector witnessed a dramatic shift on Tuesday as stocks of El Al and Israir, two of the country’s leading airlines, surged significantly following the cancellation of flights by foreign carriers. The cancellations, prompted by heightened security concerns after a missile strike near Ben Gurion International Airport on May 4, 2025, have reduced competition, allowing Israeli airlines to capitalize on increased demand for air travel to and from the country.
The missile strike, attributed to regional militant groups, caused no direct damage to the airport but led to a swift response from international airlines. Major carriers such as Delta, British Airways, and Lufthansa suspended their Tel Aviv routes, citing safety risks for passengers and crew. This left El Al and Israir, both of which continued operations under strict security protocols, as the primary options for travelers. According to financial reports, El Al’s stock soared by 25% within two days, adding approximately 300 million shekels to its market value, while Israir saw a 15% increase in its share price. Data from the Tel Aviv Stock Exchange confirms the sharp rise, with trading volumes for both companies reaching record highs.
Statements from industry leaders reflect the mixed dynamics at play. Keni Rozenberg, the controlling shareholder of El Al, noted in a press release, “We are committed to ensuring safe and reliable travel for our passengers, even in challenging times.” Meanwhile, Rami Levi, Israir’s majority owner, reported a threefold increase in daily bookings, attributing the spike to the absence of foreign competitors. The Israel Airports Authority also confirmed that Ben Gurion Airport remains fully operational, with enhanced security measures in place to mitigate risks.
The cancellations stem from escalating tensions in the region, particularly following a series of cross-border skirmishes between Israel and Iran-backed militias in Lebanon and Syria. The missile strike near Ben Gurion Airport, though not directly targeting civilian infrastructure, heightened fears of further attacks. Historically, foreign airlines have been quick to suspend operations to Israel during periods of conflict, as seen during the 2021 Gaza conflict when similar cancellations occurred. Israel’s aviation sector, however, has adapted to such disruptions, with El Al and Israir maintaining robust security protocols that include missile defense systems on their aircraft—a measure not commonly adopted by foreign carriers.
Public reaction, as observed on platforms like X, reveals a polarized sentiment. Some Israelis view the surge in local airline stocks as a silver lining amid the crisis, with one user commenting, “Finally, our airlines are getting the boost they deserve.” Others expressed frustration over the cancellations, noting the impact on tourism and business travel. “This just isolates us further—fewer flights mean fewer visitors,” another user wrote. Industry experts echo these concerns, warning that prolonged cancellations could harm Israel’s tourism sector, which contributes roughly 3% to the national GDP, according to the World Travel and Tourism Council.
The economic implications extend beyond tourism. The cancellations have led to a sharp increase in airfares, with some routes seeing prices double within 48 hours. This has sparked criticism from consumer advocacy groups, who argue that the lack of competition is unfairly burdening travelers. On the other hand, the financial windfall for El Al and Israir provides a much-needed buffer for an industry that has faced challenges from fluctuating fuel costs and past pandemic-related losses. Analysts estimate that the two airlines could see a combined revenue increase of up to 500 million shekels if the cancellations persist through the summer travel season.
Looking ahead, the situation remains fluid. The Israeli government has engaged in diplomatic efforts to reassure foreign carriers of the safety of its airspace, with the Transport Ministry stating, “We are working closely with international partners to restore confidence in travel to Israel.” However, security experts suggest that the resumption of foreign flights will depend on a de-escalation of regional tensions, which shows no immediate signs of resolution. For now, El Al and Israir are poised to dominate the market, but questions linger about the long-term impact on Israel’s connectivity and economic stability. As the conflict evolves, the aviation sector will remain a key barometer of the region’s broader geopolitical climate.
