The crowd at JFK Airport’s Terminal Four last Sunday was typical for a flight between New York and Tel Aviv. Young families with toddlers, conservatively clad Orthodox Jews, and 20-something Israeli trekkers all crowded the busy departure gate.
But in between the strollers and traditional black hats were a few curious outliers: Techie types wearing vests emblazoned with logos for places like Google or carrying backpacks bearing the names of other Israeli and multinational technology giants.
The flight — Arkia 992 — was the first of its kind to depart from JFK and was remarkable simply because it managed to get off the ground. Arkia is the first new Israeli airline to launch in the US in decades.
After more than 16 months of war with Hamas, Israel has not merely become sidelined by global cultural and political groups; the country has also become virtually shut off from the rest of the world.
Nearly every global airline has stopped flying to Tel Aviv, including major US carriers like United, Delta, and American — despite the American trio receiving no formal stoppage requests or safety guidelines from the Federal Aviation Administration.
Indeed, before the Oct. 7 Hamas attack, United, American, and Delta collectively offered nearly 60 weekly flights between the US and Tel Aviv, according to Mikey Levy, CEO of Coterie Travel Club, a Tel Aviv-based corporate travel specialist.
Today, only national carrier El Al flies to Israel from the US, sending ticket prices skyrocketing and seat availability plummeting.
“We’re talking about tens of thousands of plane seats suddenly missing from the most important market for Israeli” tech companies, Levy says.
The result: Israel’s aviation crisis has become far more than merely a tourism issue. It has emerged as a serious economic and, increasingly, political concern, as well. Last November, Bronx Rep. Ritchie Torres accused US airlines of essentially “boycotting Israel,” leaving travelers who want to fly between the US and Israel “at the mercy of a de facto monopoly.”
A similar sentiment was expressed by Texas Sen. Ted Cruz, who in January called upon US carriers to return to Tel Aviv.
President Trump has also weighed in, declaring in January that he would “force” US airlines to return to Israel. Eyal Hulata, a former national security adviser to two Israeli prime ministers, has even described the airline stoppage as “playing into Iran’s game” of isolating Israel from “the rest of the world.”
Meanwhile, amid (and partially as a consequence of) the aviation slowdown, Israel’s economy is struggling — shrinking by 4.1% during the last quarter of 2023, compared to 6.4% growth in 2022.
Part of this is due to tourism, which has come to a standstill, with US tourists “having nearly evaporated” over the past 18 months, explained Henry Harteveldt, president of San Francisco-based Atmosphere Research Group.
According to the Israeli Ministry of Tourism, arrivals from the US plummeted by nearly two-thirds between 2023 and 2024, with total global tourism figures down nearly 70%.
Although the economy has recovered somewhat, the damage has been undeniable. Total exports, for instance, have shrunk by nearly 10% — with high-tech goods comprising nearly half of Israeli exports.
This is why increased airline seats are so crucial for Israel’s economy, said Nicole Adler, professor of operations research at the Hebrew University of Jerusalem Business School.
“We are dependent on global access because our domestic market is simply too small,” Adler told The Post. “So extremely expensive access to US markets puts our high-tech sector in a very weak position.”
TURNING TO TECH
Like many Israeli tech leaders, Eynat Guez, CEO and founder of Israeli fintech firm Papaya, intuitively understood that the current airline situation was unsustainable.
Beyond El Al’s costs — economy round-trip fares between Tel Aviv and New York once priced at $1,000 have surged by four and five-fold — was the inability to simply find seats, at any price.
“Despite the war, we were trying to convince the world that it was business as usual,” says Guez, whose firm collectively flew hundreds of flights annually to and from the US before the fighting began. “But there is nothing ‘usual’ about telling a potential investor that you can’t meet because you can’t find a flight out of the country.
“We knew we had to do something.”
“Let’s start a new airline” was the initial thought of Levy, Guez, and a consortium of Israeli tech leaders who, as the war continued, held little faith in either the US carriers returning to Israel or in El Al reducing ticket prices.
Launching a new airline requires vast amounts of capital along with sophisticated regulatory know-how, particularly on international routes. But Israel has long been known as the “Startup Nation,” thanks to that vast and lucrative high-tech sector, which comprises a full fifth of the nation’s economy.
“We first began with the ‘what ifs’: What if we lease an aircraft, what if we found companies willing to commit to buying seats before the first flight, what if the plane faced technical issues?” Guez explained. “We knew there was the demand and a very eager customer base, so we incubated this idea like we would any startup.”
Such thinking reflects a shift toward war-time self-reliance across much of Israeli society, as many are losing faith in a government preoccupied with war and politics.
Like local social service groups and outraged hostage family associations, “tech entrepreneurs have certainly proven themselves to be political animals during this particular moment,” Adler says.
Despite an investigation launched by the Israel Competition Authority to determine if El Al had engaged in “unfair” pricing practices, the government has refused to intervene and compel the carrier to reduce fares to the US.
“We waited and waited and waited and nothing happened,” Guez says. Meanwhile, El Al’s profits, unsurprisingly, surged more than two-and-one-half-fold in the second quarter of 2024 compared to a year earlier.
And so TechAir was born — or at least began to gestate.
CONCEPT TO REALITY
Initially, Guez and other members of the Israel High-Tech Forum envisioned leasing a plane from one of the many international aviation companies that lease aircraft and operate the airline themselves.
Doing so, however, required proof of concept — confirmation that the group’s belief that tech leaders would sign on to a new carrier was more than merely a hunch.
Last fall, the High-Tech Forum launched a website touting the newly named, yet still plane-less, airline it hoped to start. Potential passengers were asked not only about their interest in the new carrier, but to commit, a “crowd-sourcing”-style to buying seats once it launched.
Guez and Levy, who helped oversee this process, said they needed assurances they could fill at least one-third of each flight in order to move forward.
Within days, dozens of companies — most of them tech-focused — had committed to purchasing hundreds of seats, a sign that “everyone was feeling the pressure of the situation,” Guez says.
Next up was finding an actual plane and determining which kinds of services TechAir might offer. With seats scarce and prices already so high, an all-economy cabin made the most sense — “reducing costs while increasing capacity,” Guez said.
As talks continued with foreign leasing groups, Guez and her team also considered domestic solutions. Mindful of El Al’s lucrative monopoly, the Israeli carriers Israir and Arkia had been eyeing the US market. Both airlines, however, had yet to commit until Tech Air stepped in.
Arkia, explains CEO Oz Berkowitz, had been considering a New York route since it was bought by the Nakash family — founders of Jordache Jeans — nearly two decades ago. But COVID derailed their most recent plans, quickly followed by the war with Hamas.
TechAir, which had both confirmed the viability of the market and secured sizable passenger interest, “proved a far shorter way to go from A to B,” Berkowitz continues.
And so the new New York route was launched by Arkia last week, with TechAir serving in a marketing and promotional capacity aimed at the high-tech industry to ensure firms like Guez’s have access to fares that are both reasonably priced and suit their business needs.
Companies, for instance, can change itineraries with minimal fees as well as purchase multiple seats at a time, and then decide which workers will fill them and when.
“The goal is to maximize the flexibility” companies like hers need, Levy says. Round-trip fares between New York and Tel Aviv range from $1,000 to $1,200 — similar to prices before the war began.
The Arkia launch comes at a precipitous moment for air travel to Israel. In the wake of the ongoing cease-fire with Hamas, both Delta and United announced a return to Tel Aviv flights this spring (American, noted Harteveldt, is facing a plane shortage and no return date has been set).
But with that cease-fire tenuous and US carriers repeatedly retreating from Israel since the war began, the nation’s tech community has learned the hard way that it cannot rely on foreign airlines to solve its domestic economic challenges.
“A lot can happen in the Middle East between now and the spring,” Levy says. “Ultimately, what Israel needs most is more Israeli airlines flying to the US — and around the world.”
