For all its condemnation of alleged Middle East subsidies, American Airlines certainly loves them…when it is the beneficiary of them.
Last week, I wrote about AA’s new service between Dallas and Tel Aviv, set to commence in September of 2020. The new service will operate three times weekly and utilize a Boeing 787-9, opening up a new line between Israel and the United States.
But why Dallas? And why announce the route over one year early? As Dan’s Deals reports, there is a subsidy involved. Not just any subsidy, but the largest subsidy for a new airline route in Israel’s history:
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.
At three flights per week, that translates to about $3,000 per flight. I’m not sure the cost of one business class was enough to push AA over the edge, but it certainly did not hurt.
Dallas is indeed an interesting choice for a new route. The Dallas – Fort Worth area has a limited Jewish population, so it is not that. It is also not a huge trade route. Could it be a route geared primarily toward Evangelical tourists? Time will tell.
CONCLUSION
Gary Leff calls it the “subsidies should be for me, but not for thee” argument and it is tough to argue otherwise here. We can debate the scale and intent of such subsidies, but AA has shown us again that it does not consider all government subsidies bad…
> Read More: Making Sense of American Airlines’ Latest Route Additions
“Could it be a route geared primarily toward Evangelical tourists?”
Bingo?
Re: why Dallas? There are a surprising number of Israeli biotech/pharma companies with ties to the DFW area. Some of that extends down to the Austin area as well. Not enough to support a daily flight I don’t think, but perhaps enough to make 3x weekly work when combined with leisure and connecting traffic.
As an aside (and NOT directed at you personally), it sure is irritating as a long-time DFW resident to see literally every major travel blog push this route as a play for “Evangelical tourists”, without even a mention of potential business reasons. Just goes to show we Texans have a long way to go to ditch the coastal stereotype that we’re a backwater full of Bible thumpers…
RE: “Evangelical tourists”
I don’t see that term as disparaging in any way nor equate (all) Evangelicals with “backwater”.
But good observation on the Israeli biotech/pharma companies.
The term itself is not disparaging, but look at it from this perspective. Literally every article I’ve read about DFW-TLV suggests it’s to cater to Evangelical tourists looking to visit Israel – as if that’s the only type of people that live here and there couldn’t possibly be other business reasons (to be clear, I’m not saying that’s what you are suggesting). It certainly creates the perception that the rest of the world still looks at us as little more than a dot on the map in the Bible Belt, and that the powers that be still have work to do to change those old perceptions.
Anyway, I’ll get off my soapbox now…
You make some really good points that I hadn’t considered. Until your comments, I hadn’t considered that in a lot of cases, evangelical pretty much equals religious redneck. I’m not judging the accuracy of the euphemism, but you’re right that the stereotype exists.
You probably dont know that American Airline own money to TWA in Israel , so if they put this rout back ( last flight was in 2014 from PHL ) they paid it back
Doug Parker went on the record recently to refute that rumor.
Coastal stereotype?
@MeanMeosh :
please don’t pretend Dallas has any meaningful tech scene just because a few back-office coders work at AT&T or the ones maintaining mainframes at American Airlines. If the tech scene is so vibrant they’d launch the flight with at least 5x weekly if there’s any hope to gain a loyal following.
No one takes AA seriously when their “bio/pharma/tech” traffic you’re hyping about can only support roughly the same weekly frequency as some of the more fringe and new summer-only seasonal ORD-Europe routes by AA.
Sure one can claim they’re “playing safe” but there’s also a fine line between that and below the minimum threshold for post-subsidy self sustainability.
“Just goes to show we Texans have a long way to go to ditch the coastal stereotype that we’re a backwater full of Bible thumpers”
Right … it’s us at the coasts framing you guys like that instead of Vasu Raja, VP of Network Planning at AA, saying that himself.
DFW is actually a very good spot for them to fly to TLV. Its the largest AA hub and anyone can get there. Where it hurts AA flyers is those who have to backtrack to DFW to fly to Israel. This is a route they could service from the east coast, JFK (haha), PHL or MIA and rotate planes like they do with the HKG flights.
What a basic way of thinking.
First of all, DFW is AA mega hub, that already tells you why.
Second, only religious people go to Israel?
Third. It’s a great and convenient way for people living in SW US and Texas to connect without the need to fly to EWR or JFK.
Plus, Israelis travel A LOT.
@Esteban : i dunno how bad you are at US geography but for folks in west coast there’s LAX-TLV nonstop on El Al and SFO-TLV on both El Al and UA, so there are definitely options from multiple gateways and multiple airlines who wanna avoid a layover through NYC.
“southwest US” ….. right .. because there’s so much demand out of Albuquerque and Flagstaff to TLV.
The largest demand to TLV are NYC, South Florida, LA, Chicago, and SF. While DFW is central to everyone and can serve as an effective point for people who don’t value their time and don’t mind connections, picking DFW for a TLV service is definitely a jack-of-all trades, master of none scenario.
Connecting traffic? I’m LAX-based and LAX-DFW-TLV is a totally reasonable routing for me… even moreso if I can fly BUR-DFW-TLV
I don’t know any stats but vast numbers of Christians ( common/garden variety in addition to the nutty fringe ones) go to Israel every year.
The headline here “A MIDDLE EAST SUBSIDY AMERICAN AIRLINES LOVES” seems agenda-driven, and not factual. The Middle East airlines gets BILLIONS in subsidies from their home countries to operate their global, money-losing airline operations. Here, AA is not even getting a million from Israel to see if a new route to that country is viable. This is the equivalent of equating buying somebody a coffee with buying them a house.
The argument against the ME3 is bunk and finally, Trump, with his protectionist mind frame told them to pound sand. It is what it is, US3 just want to suck as much as possible but charge more.