Hungary's Wizz Air plans to set up a base in Israel by April next year, sparking backlash from local airlines over the ultra-low-cost carrier's entry into the market and increased competition.
The European airline aims to invest $1 billion in the Israeli market in the next few years by basing 10 aircraft and creating 4,000 jobs in the country, The Jerusalem Post reported. It is also to more than double the size of its network to 50 routes in the next few years, up from its existing 21 routes, The Times of Israel reported.
Wizz Air chief executive Jozsef Varadi met Israeli Transport Minister Miri Regev to discuss the market opportunities in the country. He said lowering living costs was an important issue for the government in Israel and authorities around the world.
"We can add value by creating a low-cost air traffic infrastructure for people to travel," Mr Varadi said in a video posted on Ms Regev's X account.
The two sides met to discuss regulatory, technical and business issues to understand the next steps. They aim to resolve those issues by the end of January and begin operations by March or April, he said.
"We are fully committed to make further progress, we are fully committed to put the idea of a Wizz Air base into effect here in Israel," he added. "We want to be seen as your business partner, we want to be seen as a good corporate citizen embedded in Israeli society."
The move comes after Wizz Air said in July that it would exit its operations in Abu Dhabi, its only base in the Middle East at the time, to focus on its core markets after a "comprehensive reassessment" and "strategic realignment".
Domestic airlines retaliate
Wizz Air is considering a base at either Israel's Ben Gurion International Airport near Tel Aviv, where the airline currently operates flights, or the smaller Ramon Airport near the Red Sea resort city of Eilat, Reuters reported. However, the move has been criticised by Israeli airlines.
Israir said it created "unjustified gaps between Israeli and foreign airlines that directly harm the Israeli public, reduce the local flight supply and leave Israel exposed to dependence on international airlines that will sharply raise prices later on", Reuters said.
In an interview with Army Radio on Sunday, Arkia airline chief executive Oz Berlowitz said Wizz Air should also be required to pay the same high security costs as Israeli carriers. Israel's main labour union has also expressed concerns over the plan.
Ms Regev said she was in contact with Israeli companies and was "well aware" of their concerns, as well as those of the workers' unions.
Israel's war on Gaza, which began in 2023, has tanked its economy. It has also been affected by the country's 12-day war with Iran in June. "Our forecast for 2025 [for Israel's economy] was downgraded from 3.3 per cent real GDP growth to 1.7 per cent real growth right after the military conflict began between Israel and Iran almost two weeks ago," Ralf Wiegert, head of Mena Economics at S&P Global Market Intelligence, said at the time.
The total economic losses to Israel following the war with Iran are estimated to be about $6 billion, with infrastructure hit particularly hard. The war is likely to cost Israel about 1 per cent of its GDP, or about 20 billion shekels ($5.9 billion), Bank of Israel governor Amir Yaron told Bloomberg in June.
