The agreement was reached following US President Donald Trump’s attempted peace deal between Israel and Palestine which placed no conditions on Israel and would see the US recognise Israel’s sovereignty over its West Bank settlements, while the Palestinians were required to meet difficult conditions to establish a state and even then sovereignty was to be limited.
The first formal flight took place on 31-Aug-2020 between Tel Aviv and Abu Dhabi and included delegates from the US and Israel who travelled to promote the agreement. Following the agreement, UAE President Khalifa bin Zayed lifted an economic boycott against Israel and US officials have attempted to persuade more states in the region to normalise relations with Israel.
The state of Israel has not been recognised by the majority of countries in the Middle East and North Africa since its establishment in 1948. Only Israel’s neighbours Egypt and Jordan have recognised Israel and normalised ties, although covert ties with a number of countries in the region have been maintained by Israel over the years.
As noted by Riskline, establishing ties with Arab countries has long been a strategic goal for Israel to help its image in world politics and to do more business regionally. Indeed, trade with the UAE is expected to be much more substantial than trade ever was with Egypt and Jordan.
Riskline makes the point that as a major diplomatic achievement and step towards peace and stability in the Middle East, the agreement will also lead to commercial, diplomatic and security ties between the UAE and Israel. Beyond Israel and the UAE, the agreement is likely to have a profound impact on the region with some countries standing to benefit more than others.
Emirates Airline COO Adel Al Redha recently stated that many sectors are set to benefit from the agreement between Israel and the UAE, including aviation. Mr Al Redha said there will be “a lot of opportunity” for trading and business between the two countries, but noted an agreement needs to be put in place between the UAE and Israel before plans are made to launch an Emirates service to Israel.
Despite pressure from the Trump administration for other Arab states to follow the UAE’s lead, Saudi Arabia, Sudan, Bahrain, Kuwait and Oman have all since rejected the possibility of normalising ties with Israel. Riskline reported: “Normalising is a much bigger ask for other states in which, unlike the UAE, leaders are more influenced by public opinion which tends to be pro-Palestinian.”
“Although Saudi Arabia has officially rejected normalising ties, the first flight between Tel Aviv and Abu Dhabi crossed Saudi Arabia, marking the first time an Israeli flight has entered Saudi airspace and a subtle hint that the Gulf’s largest economy approves of the agreement,” it adds.
In today’s Covid-influenced environment it is hard to identify how big an opportunity this is, but both El Al and Israir have moved quickly to secure traffic rights to serve the market and reports suggests Israelis are quickly booking tickets with medical tourism seeing a particularly strong initial demand. A look back into 2019 through the eyes of OAG’s Traffic Analyser module shows MIDT data (Marketing Information Data Tapes) projects an indirect annual market of around 70,000 passengers between Tel Aviv and the Middle East region, a sizeable market that will grow with he stimulation of more direct connectivity.
This has been mainly satisfied by Royal Jordanian via Amman and to a lesser degree by Turkish Airlines via Istanbul. The former will certainly feel the effects of the new regime with the likely loss of traffic to the new non-stop offerings into the United Arab Emirates (UAE) and perhaps even some indirect flows once Emirates plays its cards. As the sole non-stop into the region, the Tel Aviv-Amman city pair has the largest flow, but around 45% of passengers on the route are flying onwards within the Middle East with Tel Aviv-Dubai the largest unserved market., based on the 2019 data.
The agreement also facilitates air freight access and there are obvious trade benefits that would underpin cargo connectivity between the two countries. Additionally, there are the obvious accessibility options into wider global markets that will be more conveniently served via the major UAE airport hubs, albeit Covid restrictions may dilute this in the medium-term.
UAE – Israel market will certainly support both business and leisure flows and the demographic would be attractive to both full-service and low-cost operators alike. New access to Israel for the large Jewish diaspora will certainly be applauded, supplementing existing connections and providing new quicker connection options.
The largest concentrations are in the United States of America, France, Canada, the United Kingdom, Russia, Argentina, Germany and Brazil, but significant Jewish populations also remain across the Middle East and North Africa, particularly Iran, Turkey, Morocco, Tunisia, and Yemen.