El Al is grounding Up!, its low-cost daughter carrier that ferried Israelis to destinations in Europe. In place of the soon to be defunct brand, El Al informed the Tel Aviv Stock Exchange Wednesday that it would develop a new marketing plan for flights to European destinations in the second quarter of 2018.
Up! was designed to compete on lines where other low-cost airlines, like RyanAir and Wizz Air, were flying. Begun in 2013, Up! offered flights to Cyprus, Czech Republic, Germany, Hungary and Ukraine. However, the fares were never as low as the competitors, and the high operating costs at El Al made the brand a money-loser for the company, analysts said.
Instead of a dedicated low-cost carrier, El Al said Wednesday that its new plan would be based on an “a’ la carte” menu, offering a sliding scale of services for different fees. Flyers who choose not to check in any luggage and who are fine with a seat assigned to them by the airline will pay the least; a second tier would allow choice of a seat, but no changes; the most expensive package would allow passengers to take luggage, choose a seat, and have some flexibility on changing flights.
This is how many of the low-cost airlines, like Wizz Air, operate. According to El Al, the price difference between the cheapest and most expensive ticket would be about $100 per segment, a significant amount on flights that are generally less than $500 for full fare in either direction. Ticket sales under the new plan would begin in the second quarter, the airline said.
The airline said that it expected the new plan to have a positive impact on the company’s bottom line. At a press conference Wednesday, Gonen Ussishkin, deputy director of the company, said that “after four years of activity we feel that Up! has gone as far as it can — but it wasn’t enough, our customers said, and we listened. Some customers want premium services, which were not available on Up! We know that one thing our customers want is freedom of choice. Having different brands is sometimes problematic, so we are reunifying all our operations under the name El Al,” he added.