American Airlines to drop Phila.-Tel Aviv service

American Airlines will discontinue flights between Philadelphia and Tel Aviv, Israel, in January because the route was losing money with intense competition from the New York-area airports.

American will close its station in Tel Aviv. The airline does not fly to Israel from another city.

"At the six-year mark, we have yet to turn a profit on this route," said Rhett Workman, American's managing director of government and airport affairs.

"We really tried to make a go of it. We were hoping that with the merger" of US Airways and American in December 2013, "and, more recently, with the significant reduction in fuel prices, the route would turn to the black. Unfortunately, that has not been the case."

The Nutter administration called on Philadelphia's largest airline, with 76 percent of the market, to reevaluate the decision, saying it was "very disappointed." The mayor has made two economic development trips to Israel in recent years.

"In the future, this business decision may be viewed as shortsighted as more Israeli businesses express interest in Philadelphia," the administration said. "Indeed, we're now seeing a trend where Israeli firms have decided to locate their operations in Philadelphia."

Halting the flights "sends the wrong message about our city and region as an open and business friendly locale and damages American Airlines' reputation as an international business," the mayor's office said.

Workman said: "We've kept the route in the market longer than we have other routes, even though it was underperforming, because of all the significant business and community links associated with it.

"It's a very tough decision," Workman said. "We have 19 employees on the ground in Tel Aviv. We have colleagues and friends on that side, and a lot of strong partnerships with the Tel Aviv and Israel community."

More than 70 percent of the passengers on the Tel Aviv flights were connecting from elsewhere, Workman said. American could not raise the fares enough to cover its costs because those customers would connect through another city.

Richard Bendit, president of the Philadelphia-Israel Chamber of Commerce, said the nonstop daily flight between Philadelphia and Israel in July 2009 was "heralded as a 'game-changing' move, expected to boost both commerce and tourism between Israel and the Greater Philadelphia region."

Since 2009, the Philadelphia area has "become a gateway for U.S.-Israeli trade," with about 25 percent, or an estimated $5 billion, "of all Israeli exports to the U.S. passing through our region," Bendit said.

Passengers on the inaugural flight to Tel Aviv on July 2, 2009 said they were appreciative to have another option for flying directly to Israel, and said the fares were cheaper than those from other cities.

Previously, Philadelphians bound for Israel flew out of Newark or New York's John F. Kennedy International Airport. Israel's El Al Airlines had dominated the market, although Delta Air Lines and United Airlines fly to Tel Aviv from the New York area.

"We looked at every single option with every single aircraft that we have," Workman said. "The reason we've had the route in place for six years is because of the tremendous support we've had from the city," including political leaders and the business community.

The 5,700-mile flight is about 12 hours to Israel and 13 hours back, and was the longest in the US Airways' network and its first to the Middle East.

The route required two aircraft. US Airways used Airbus A330-200 planes with 258 seats. "The flights were full for the most part," Workman said.

"But that's not an indicator of profitability. It depends on what yield you are getting from your customers," he said. "Any airline can fill any flight full if you drop your price low enough. We were not getting the revenue from the passenger side of the aircraft that we needed to make this flight profitable."

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