We'll be flying high again soon

El Al is fighting tough headwinds. Uri Danoor, chief of the airline’s UK operations, on strategy, competition and flying from Manchester.

By Candice Krieger, September 16, 2010

With soaring competition, the recession and ongoing unrest in the Middle East, El Al has had a tough few years: the national carrier lost around 10 per cent of its market share of UK passengers flying to Israel over 2008 and 2009.

But the airline is battling back. Uri Danoor, chief executive of its operations in the UK, northern Europe and South Africa, says that the airline has come up with new ways of clawing back business.

He says: "The past few years have been one of the most challenging periods for El Al in the UK. The events in Gaza at the start of 2009 had a major effect. We suffered a lot in 2009."

He also attributes the decline to "a combined factor of the financial crisis - which affected UK passenger demand more than any other country - plus very fierce competition from other airlines because of the open skies agreement between the UK and Israel. Everything came at the same time."
El Al made a loss of $76m in 2009.

But competition is healthy, says Mr Danoor, 61. "It is good for us. Maybe for the short-term you lose but it forces you to be more efficient, creative and come up with new plans." He cites BMI as their "most serious competitor.

Uri Danoor

Uri Danoor

"They hit our premium customers and then at the other end we had easyJet, which tried to take customers looking to cut costs." El Al UK has since started to gain back the market share. "The customers started to come back to us."

The group is currently responsible for around 40 per cent of traffic into Ben Gurion airport and forecasts revenues of $2bn for 2010, compared to $1.65bn in 2009.

"When we saw the competition, we had two choices. One was to shrink. The other was to expand and fight for the loyalty of our customers. We analysed things and found that we needed an earlier departure time from the UK, and a better airport location."

El Al subsequently launched a service from Luton, which has proved a big success, with one third of El Al UK traffic now flying from and into Luton airport.

"In the beginning it was mainly passengers from north London using the service, but now the business community is realising its convenience."

That said, while the route is popular with UK passengers, Israeli passengers are not flying into Luton. "They don't see it as a London gateway. We have to invest a lot in promoting Luton in the Israeli market. It's very hard."

Yet a bigger worry for Mr Danoor, who has worked at El Al for 36 years, is the lack of UK tourism to Israel. Compared to 2008, it has declined by seven per cent. "This is very serious. It's a crisis. Part of the reason is the economic situation and part of it is because Israel struggles to attract tourists."

He acknowledges that El Al is in a unique position, affected by geopolitical and security factors that don't affect other foreign carriers. "We don't feel like a normal commercial airline. We are totally influenced by what is happening in Israel. The moment something happens in Israel, El Al either gains or suffers." But then, things could be worse. "I think the one that has suffered the most is British Airways." Surely BA's recent bad press is good for El Al, if people are losing trust in flying with them? "Yes, but it's temporary and we want to rely on ourselves and what we do."

So, what is El Al doing to maintain market share? "We have to take the leadership and encourage tourism to Israel now." Mr Danoor is on the board of directors of Superstar Holidays, an El Al subsidiary, which provides holidays to Israel.

In July, Superstar launched Discover Israel, a tailored tour service for first-time visitors to Israel. They recently sold 40 in a week.

"Advertising is important but it's not the main tool. The main tool to bring tourism to Israel is word of mouth." El Al is also devoting efforts towards the business community, demand from which he says has picked up. "There are more and more business transactions between the UK and Israel, bringing a lot of business traffic."

The company has established Business Plus - a bonus scheme for companies in the UK and Ireland. So far, more than 100 companies have signed up. What's more, Mr Danoor says he is always eyeing up new routes, including a direct flight from Manchester. "Every year we check it. There is demand but at the moment, it is not cost-effective. But we are giving it a very close follow up and checking it all the time."

In the mean time, the airline will be hoping to profit from Succot, one of their busiest periods of the year, as well as Passover and August.

A father of three, Mr Danoor graduated in management and industrial engineering from Haifa's Technion before joining El Al in 1974. "I was born in El Al," he jokes.

He turned down the offer of an academic scholarship in America to take up a position in El Al's operations research department. Several different roles - vice president of sales, head of marketing and general manager for the Netherlands, among others - have since followed. He moved to the UK in 2007, becoming chief executive officer for the UK, northern Europe and South Africa.

Two of his grown-up children are still in Israel; another lives in America.

Mr Danoor lives with his wife in St John's Wood, north London.

Last updated: 10:30am, September 16 2010