Holidaymakers received a double dose of good news this week with a prediction that the cost of flights to Israel are set to be slashed, and a U-turn by the Israeli government over its proposal to levy 18 per cent VAT on tourism.

According to a senior Israeli tourism official, the price of an air ticket from the UK to Israel may fall by up to 30 per cent when the new open-skies policy comes into force in April next year.

Naama Oryan-Kaplan, director of the Israel Government Tourism Office in the UK and Ireland, said she anticipated prices would be reduced by between 20 and 30 per cent under the new rules which will open up routes to airlines in the European Union.

Carriers are expected to reduce their prices to attract an additional 250,000 tourists from the EU.

“This is a positive development in the Israel tourism industry,” said Ms Oryan-Kaplan. “There will be many options for new carriers to enter the Israeli market, including low-cost airlines.”

A pre-booked return ticket from London to Tel Aviv on El Al currently costs between around £400 and £430 for an adult flying economy class. If the anticipated reduction takes place, the price could fall to as low as £280.

Ms Oryan-Kaplan said: “There has been already an interest from airlines, and new routes should be announced soon.”

The chief executive of Ryanair has told tourism industry figures that the budget airline would consider flying to Israel under the open skies agreement.

Speaking at a UK Israel Business event, Michael O’Leary promised to route Ryanair flights to Israel if there was a level playing field for competition. “We would like a significant portion of our growth to go to places where it needs it — like Israel,” he said.

He noted that more airlines flying to Israel would make travel more affordable for passengers and boost the tourism market. Because of high prices, “tourists avoid Israel”, he said. “It’s a shame because it’s a beautiful country with enormous opportunities.”

He complained that only two of the country’s six airports were being used for international flights. “Israel is a very rich country — build some jet runways and fulfil the enormous tourism potential. We want to open up bases in Israel and put our jets there.”

Meanwhile, UK groups organising trips to Israel have reacted with relief to the Israeli government’s decision to not push forward Finance Minister Yair Lapid’s proposal to levy 18 per cent VAT on hotels and travel services.

“We’re very happy,” said Ilan Scorah, UJIA co-ordinator for tours and gap year programmes. The cost of a UJIA tour, currently £2650, “would have leapt by 12 per cent”, he said.

Harry Jardine, national director of the Federation of Zionist Youth which runs educational tour groups to Israel, welcomed the decision which, he said, followed “great lobby work from organisations across the Jewish world”.

The proposed tax was expected to reduce tourism in Israel by 14 per cent. Last year, 200,000 British tourists out of a record total of 3.4 million visited the country — which was named the eighth most expensive tourist destination by a World Economic Forum report.