Order 2021-2-5

UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation on the 19th of February, 2021

Served: February 19, 2021

In the matter of Dockets DOT-OST-2021-0021 LTD. DOT-OST-2007-0095 42457

ORDER TO FILE SCHEDULES

Summary

By this Order, and another order being issued concurrently,1 the U.S. Department of Transportation (the Department) is taking steps to address the Government of Israel’s impairment of U.S. passenger carrier operating rights provided to them under the Air Transport Agreement between the Government of the United States and the Government of Israel. Specifically, in this Order, we are imposing Phase 1 schedule filing requirements under 14 CFR Part 213 of the Department’s regulations to cover all of the scheduled combination services that El Al Israel Airlines Ltd. (El Al) operates to/from the United States.2

1 See Order 2021-2-6, imposing charter prior approval requirements on El Al Israel Airlines Ltd and Israeli Airlines, Ltd. 2 By Order 86-3-58 in Docket 42457, the Department issued El Al a foreign air carrier permit authorizing the carrier to conduct certain Israel-U.S. scheduled and charter services. El Al also holds exemption authority from the Department to engage in (1) scheduled foreign air transportation of persons, property, and mail from points behind Israel, via Israel and intermediate points, to points in the United States and beyond; (2) charter foreign air transportation of persons, property, and mail from points behind Israel, via Israel and intermediate points, to points in the United States and beyond; and (3) other charters pursuant to 14 CFR Part 212. See Docket DOT-OST-2007- 0095.

Background

Aviation relations between the Governments of the United States (USG) and Israel (GoI) are governed by the U.S.-Israel Air Transport Agreement (“the Agreement”), an Open Skies Agreement that entered into force on March 29, 2011. The Agreement establishes, among other rights, the legal basis for the carriers of both parties to provide certain air services between the two countries.3 For airlines of the United States, these rights include, among others, the right to “conduct international air transportation from points behind the United States via the United 4 States and intermediate points to any point or points in Israel and beyond.” The Agreement also establishes that “[e]ach Party shall allow each to determine the frequency and capacity of the international air transportation it offers based upon commercial considerations in the marketplace. Consistent with this right, neither Party shall unilaterally limit the volume of traffic, frequency, or regularity of service….”5

On January 24, 2021, the GoI announced new restrictions for the entry and departure of foreign aircraft to/from Israel between January 26-31.6 The restrictions have been subsequently extended and, as of February 8, were expanded to prohibit the “entry and/or departure of passenger-carrying aircraft…, except in the following cases: - The aircraft is not carrying passengers (only the crew). - The flight is for the purpose of emergency medical evacuation. - The aircraft received approval of a committee comprised of the directors general of the government ministries (Ministry of Transport and Road Safety, Ministry of Foreign Affairs, Ministry of Health). - A public flight of an Israeli air carrier that was approved by said committee.”7

These restrictions apply through February 20, 2021, and GoI officials shared that it is possible that the restrictions will be further extended.

Because of the GoI restriction, both Delta and United were forced to cancel flights with ticketed passengers booked on their U.S.- operations. At the same time, El Al publicly announced plans to conduct certain passenger flights from New York to Tel Aviv, and, as of February 9, had commenced services.

3 El Al is currently the only Israeli carrier providing scheduled combination services in the U.S.-Israel market with its own aircraft. Arkia Israeli Airlines, Ltd. holds exemption authority to conduct combination charter operations (see Docket DOT-OST-2003-16784). We also note that C.A.L. – Cargo Airlines Ltd. holds a foreign air carrier permit to conduct Israel-U.S. scheduled and charter all-cargo operations (see Order 2013-5-12 in Docket DOT-OST- 2013-0005), and at this juncture we have determined that its services should not be impacted by this action or Order 2021-2-6. , Inc. (United) and Delta Airlines, Inc. (Delta) currently provide passenger services in the U.S.-Israel market. 4 U.S.-Israel Air Transport Agreement, Article 2. 5 U.S.-Israel Air Transport Agreement, Article 11. 6 Letter from the Israel Airports Authority to Airlines and Ground Service Companies dated February 8, 2021. 7 Ibid. 2

The USG views those restrictions imposed by the GoI as inconsistent with U.S. carrier rights under the Agreement, and has voiced its objections to the GoI. The Departments of State and Transportation have engaged Israeli authorities since January 26, 2021, and raised our concerns that the implementation of the GoI restrictions are effectively preventing U.S. carriers from exercising their bilaterally authorized rights.

During a video conference on February 9, the USG again engaged the GoI through the Israeli Civil Aviation Authority (CAAI) with the goal of resolving this matter to the satisfaction of both Parties. The CAAI expressed to the USG the GoI position that Article 5 of the Agreement, titled “Application of Laws,” provides the GoI with the right to unilaterally restrict U.S. carrier services as specified above while allowing El Al to continue to conduct Israel-U.S. services, without being in violation of the Agreement. The USG responded that the provisions under Article 5 cannot be taken alone as superseding the provisions of Article 2 and Article 11, which provides that “[e]ach Party shall allow a fair and equal opportunity for the airlines of both Parties to compete in providing the international air transportation governed by this Agreement.”

Recent Developments

Israel did not act to enable U.S. carrier passenger service market access until February 18, when a new regulation was established to provide for some limited U.S. carrier passenger services. On February 19, Delta and United informed the USG that Israeli authorities had advised that each airline would be permitted to operate five roundtrip flights between New York and Tel Aviv from February 21 to March 6. El Al appears to be permitted an equivalent level of roundtrip flying between New York and Tel Aviv during the same time period.

Although the regulation published on February 18 provides for incremental improvement in terms of equality in market access among U.S. and Israeli carriers, the core problem remains unchanged. Israel continues to unilaterally dictate the terms of the market – including the routes, schedules and capacity that U.S. carriers may operate – notwithstanding its obligations under the Open Skies Agreement, and has not articulated any health basis for the restriction of U.S.-bound passenger flights.

Decision

Based on the facts before us, we find that the Government of Israel has, over the objections of the U.S. Government, impaired the operating rights of U.S. carriers and thus has acted contrary to Article 2 of the Agreement.

In reaching our decision, we do not agree with the argument put forth by the GoI that Article 5 of the Agreement regarding “Application of Laws” can somehow override the other rights provided for in the Agreement. In the circumstances presented, the restrictions have arbitrarily and unilaterally been imposed by the GoI on the U.S. passenger carriers. It is our view that Article 5 of the Agreement cannot be taken in isolation to supersede the rights embodied in the other provisions of the Agreement.

3

These circumstances require the imposition of the schedule filing requirements of 14 CFR Part 213 outlined in this Order. We conclude that the public interest requires that the captioned carriers file their schedules so that we may determine whether the operation of the services contained in those schedules, or any part thereof, “may be contrary to applicable law or adversely affect the public interest.” We are requiring these schedules to be filed no later than February 26, 2021.

The USG fully respects Israel’s right to impose entry requirements, including immigration measures. However, the Department takes issue with any flight restrictions that are imposed in a manner inconsistent with the Agreement. The Department will continue its attempts to collaborate with the GoI to develop a solution that provides the necessary health safety protections while maintaining the rights of our carriers under the Agreement.

ACCORDINGLY,

1. El Al Israel Airlines Ltd. shall file with the Department (via electronic mail to [email protected] and in Docket DOT-OST-2021-0021) by February 26, 2021, any and all of its existing schedules for combination services, including code-share, common branding, and extra sections, between any point or points in the United States and any point or points not in the United States, which shall include: • the type of equipment used or to be used, • the frequency and day(s) of operation of each flight, • the specific airport served at each point, and • the time of arrival and departure at each point;

2. El Al Israel Airlines Ltd. shall file with the Department (via electronic mail to [email protected] and in Docket DOT-OST-2021-0021) any and all of its proposed schedules for combination services, including code-share, common branding, and extra sections, between any point or points in the United States and any point or points not in the United States, including the information noted in ordering paragraph 1 above, the proposed effective date of such schedules, and the proposed termination date of such schedules (if known), at least 30 days prior to inauguration of service;

3. We may amend, modify, or revoke this Order at any time and without hearing; and

4. We will serve this Order on El Al Israel Airlines Ltd.; the Embassy of Israel in Washington, D.C.; the Departments of Commerce and State; the Transportation Security Administration; and the Federal Aviation Administration.

By: Carol A. (Annie) Petsonk Acting Assistant Secretary for Aviation and International Affairs (SEAL) An electronic version of this document is available on the World Wide Web at: http://www.regulations.gov 4