Arkia to Launch Long-Haul with Airbus A330-900neo Deal

The aircraft will help Arkia to expand its growing operations into long-haul business and leisure markets and will operate alongside the four A321neo aircraft ordered by the carrier at the Farnborough International Airshow in 2012.

Independent Israeli carrier, Arkia Israeli Airlines, has signed a Memorandum of Understanding (MoU) with Airbus for up to four A330-900neo aircraft. The airline is the first Airbus widebody customer in Israel and the first customer for the type in the region.

The aircraft will help Arkia to expand its growing operations into long-haul business and leisure markets and will operate alongside the four A321neo aircraft ordered by the carrier at the Farnborough International Airshow in 2012.

“The A330-900neo will be a key asset to help us grow efficiently on highly competitive international long-haul routes from and to Israel. The A330-900neo will offer our passengers the latest product with great cabin comfort on direct, long-haul flights,” said Nir Dagan, president and chief executive officer, Arkia Israeli Airlines.

The Israeli long-haul market is currently dominated by national carrier El Al and this deal highlights Arkia’s intent to compete further with the airline. It is currently Israel's second-largest airline, operating scheduled domestic and international services, as well as charter flights to destinations in Western Europe and across the Mediterranean. It currently has a fleet of ATR turboprops, Embrear E-Jets, alongside two Boeing 757-300s.

Arkia is majority controlled by Nakash Holdings, the private investment office arm of Jordache Enterprises. The company manages a multibillion-dollar investment portfolio including MG Aviation in Hong-Kong, U.S. POLO Assn, retail, agriculture, transportation, manufacturing, hotels and real estate located in prime locations throughout the world.

“Thanks to the proven reliability and fuel efficiency of the A330 family, the A330neo will also ensure that our majority shareholders, the Nakash brothers and Jordache Enterprises, are super happy,” said Dagan.

The airline’s ambitions to grow into long-haul business and leisure markets first became apparent in 2006 when the Nakash family ordered two Boeing 787-9s with the intent to introduce flights to long-range destinations in the Far East and the United States.   These were originally due for delivery in 2012 but were subsequently removed from the Boeing orderbook. Now, it appears the carrier has turned to Airbus to support these growth ambitions.

“The combination of the A321neo with A330neo in ARKIA’s fleet will allow the airline to reap the benefits of Airbus’ unique aircraft commonality, offering unrivalled efficiencies, with the most modern, fuel efficient and streamlined fleet,” added John Leahy, chief operating officer customers, Airbus.

In the chart, below, we highlight the largest country markets in the Asia/Pacific and Americas regions by bi-directional O&D demand in 2014. The United States is the largest long-haul market from Israel, generating over two million annual passengers last year. The largest destination markets in the country where New York (JFK), Newark (EWR), Los Angeles (LAX), San Francisco (SFO), Miami (MIA), Chicago (ORD) and Boston (BOS), with all generating over 50,000 annual O&D passengers.

After the USA, the largest markets from/to Israel are Thailand (around 220,000 passengers), Canada (200,000 passengers), China (132,000 passengers), India (115,000), Brazil (95,000), Hong Kong (88,000), Mexico (65,000) and Argentina (63,000).

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