Wizz Air's 'high-stakes' Israel base exploits market gap but risks are 'severe'

High operational costs and security among major challenges to foreign carriers

The ultra-low cost carrier plans to base 10 aircraft in Israel. EPA-EFE

Wizz Air's plans for a base in Israel allows the airline to exploit a gap in the market for low-cost carriers after a retreat by competitors Ryanair and easyJet, but risks are high, according to analysts.

The Israeli aviation market poses a tough challenge for foreign carriers who face high operational costs, steep security risks and mounting uncertainty due to geopolitical volatility, they say.

The decision 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”.

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Wizz Air’s decision to station aircraft in Tel Aviv is a “high-stakes strategic pivot”, Dean Mikkelsen, an independent aviation and security analyst, told The National.

“This move is less about building a regional 'hub' and more about exploiting a lucrative market vacuum,” he said.

“By entering Israel now, Wizz Air is betting on the high-yield, inelastic demand of an 'island economy' where competitors like Ryanair and easyJet have retreated, allowing it to challenge El Al’s monopoly and capture significant market share despite the active conflict.”

Wizz Air said on Sunday it was planning to establish a hub in Israel by April, amid objections from local airlines.

The ultra-low cost carrier plans to base 10 aircraft in Israel, double its network size and create thousands of jobs, local media reported. This builds on Hungary-based Wizz Air's current flights from Europe to Tel Aviv.

The move comes amid a fragile ceasefire in the Israel-Gaza war that began in October 2023. However, Israeli forces have continued to attack Palestinians, with the Palestinian death toll crossing 70,000 over the weekend.

Many foreign carriers have suspended flights to Israel due to the war. This has benefitted flag carrier El Al, which reported an 8 per cent rise in third-quarter profit. El Al, Israir and Arkia are the main market players.

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Securing incentives

Wizz Air's success in establishing an Israeli base would depend on several factors, including securing meaningful government incentives to offset high aviation costs and navigating operational challenges, analysts say.

I wouldn’t be surprised if Wizz Air have sought a very large incentive discount from the authorities to start these services

John Grant,
OAG analyst

“Its an attempt to reset their business in a market with a relatively low level of low-cost carriers' activity but one fraught with issues around competition and the continual geopolitical challenges,” John Grant, senior analyst at travel consultancy OAG, said.

“I wouldn’t be surprised if Wizz Air have sought a very large incentive discount from the authorities to start these services as part of the wider attempts to rebuild market confidence in Israel.”

Europe's biggest budget airline, Ryanair, has said it will not restart flights to and from Tel Aviv this winter, as the capital's Ben Gurion Airport refused to confirm the Irish carrier's summer 2026 slots or guarantee access to its low-cost terminal, Reuters reported. British budget airline easyJet also announced that it would extend the suspension of all routes to and from Tel Aviv until March 28 next year, Times of Israel reported.

Wizz Air’s success will “depend entirely” on securing a “privileged cost structure” that its competitors could not secure, Mr Mikkelsen said.

“The Israeli government’s economic imperative to restore tourism traffic suggests it will prioritise Wizz Air’s expansion over protectionist complaints,” he said.

If Wizz Air secures the right incentives, other carriers will clamour for similar benefits or exit the market, analysts say. “Ryanair certainly won’t tolerate preferential treatment to Wizz Air – and El Al, at the other end of the spectrum, will be equally watching this closely,” Mr Grant said.

A risky bet

Wizz Air already has experience operating in the Israeli market and there is demand to visit friends and family between the country and several European markets.

“This provides a strong upside in terms of potential traffic,” John Strickland, a UK-based aviation analyst and director of JLS Consulting, said.

There is also the advantage of financial yield as it offers passengers in Israel affordable flights and new routes into Europe. “With limited competition, Wizz can command higher fares while still undercutting legacy carriers,” Mr Mikkelsen said.

On the downside, this is a “price-sensitive” market that notably Ryanair exited citing high operation costs. “Low prices and high operating costs do not go together, so I imagine this has been a point of discussion for Wizz Air [with the authorities]”, Mr Strickland said.

Wizz Air would also need to weigh the risks of stationing aircraft in a country that is still in conflict with its neighbours in Gaza and Lebanon, thereby exposing its assets to potential grounding and damage.

“We have seen regular disruption to Israeli air services for airlines, over the last year in particular, due to geopolitical security considerations,” Mr Strickland said. “This would be an important consideration for Wizz in deciding to go ahead with a full base.”

Opening a base in Israel also means Wizz Air would get negligible passenger traffic from the wider Middle East, analysts say. “The volume of regional transit traffic will be virtually non-existent,” Mr Mikkelsen said.

“Diplomatic realities and strict security processing at Ben Gurion Airport mean that passengers from the wider Arab world cannot and will not use Tel Aviv as a transfer point. This factor eliminates the transit volume Wizz Air sought in Abu Dhabi, confirming that this is a specialised point-to-point operation.”

Another risk is technical challenges, notably shipping spare jet engines into a conflict zone during a security crisis. “This could prove to be the operation's Achilles heel,” Mr Mikkelsen noted.

Success factors

Linus Bauer, founder of UAE-based boutique consultancy BAA & Partners, stressed that Wizz Air will need a long-term commitment from Israeli authorities to maintain competitive fees and tax regimes so that costs remain low relative to projected yields.

Creating a local operation with crew will be key because international crews rotating daily would be “prohibitively expensive or politically sensitive”, he said.

It will also need reliable slot allocations and a clear network and traffic-rights strategy, possibly with some flexibility to fly beyond Europe. Otherwise, the hub may be underused or overly dependent on a narrow market, he said.

If Wizz Air establishes a base in Israel, it could succeed - but not automatically, and only if cost-structure, slot access, local staffing and political or regulatory stability align

Linus Bauer,
founder of consultancy BAA & Partners

“If Wizz Air establishes a base in Israel, it could succeed – but not automatically, and only if cost-structure, slot access, local staffing and political and regulatory stability align,” Mr Bauer said. “For now, I see it as a medium-to-high risk and medium-reward bet.”