Israel is not a large country. Because of this, domestic flying has never been of much importance. There are flights out of both Tel Aviv airports (TLV and SDV) to the resort town of Eilat, but even that is within driving distance. This fact has left Israel’s air travel market as one that focuses on flying to international destinations. Competition is heating up and El Al is planning to go head-on with a lower-cost version called Up.
Israel, though an extremely high-tech and growing economy, also has some market features that make it unique compared to equivalent countries in different climates. There is a gigantic Visiting Friends and Relatives (VFR) market. There is also a lot of business traffic traveling from Continental Europe on restrictive travel budgets. Realistically, most of the high-yield traffic comes from destinations in Northern Europe, North America, and Asia. British low-cost carrier easyJet is expanding its services to Tel Aviv at a seemingly unending rate. There is even talk of Easyjet competitor RyanAir starting Tel Aviv service this year.
Traditionally, Israeli flag carrier El Al has ceded the outbound Israeli tourist market to airlines like Sun D’or and Arkia. Those airlines, however, are not very well known to passengers outside of Israel.
El Al, therefore, has decided to turn the tables. They know that as a full-service carrier, they are at a cost disadvantage to the coming threat of RyanAir, so they have decided to head them off at the pass.
Starting on March 30th of this year, Up will offer up to 50 flights per week to five destinations in Southern and Eastern Europe.
Up, unlike its European competitors, will not offer a single low-cost product. They will offer a traditional low-fare/low-cost economy cabin, but will also offer an economy “plus” product (marketed as Economy Class Plus) befit with all the traditional economy plus benefits. On medium-haul flights such as Tel Aviv-Kiev, such a product will likely be extremely popular. Especially considering that passengers on “Up Smart” fares will be able to access the King David Lounge at Ben Gurion Airport (TLV).
What differentiates Up, at least within Israel, is that passengers flying on Up-branded flights can still earn status miles on their El Al Matmid accounts. As such, when one has status with El Al, the status and benefits carry over to Up and all the benefit.
Unfortunately for us Seattle-area spotters, all of Up’s initial 737-800s (five in total) are being transferred from El Al. In fact, the first frame has already been painted in the Czech Republic. Maybe one day, however, the Up livery will appear on a brand new 737 out of Renton.