Daniel sent us this one, and honestly it's been sitting in my mind since I read it. He's asking about what actually happens when an airline announces a new direct route between two cities, specifically using the Israel-Ireland connection as the case study. A route that was lobbied for on both sides, launched, and then canceled. And his question is really about the machinery underneath that announcement, the overfly rights, the airport slot negotiations, the financial modeling, all the things that have to go right before a single plane lifts off. And then what happens when they go wrong.
The Israel-Ireland route is such a perfect example for this because it had everything working against it, and for a brief window, it existed anyway. And now it doesn't.
Which tells you something about the people who pushed for it in the first place. That's a lot of work to end up with a canceled flight.
A lot of work is an understatement. We should say upfront, by the way, today's script is brought to us by Claude Sonnet four point six, our friendly neighborhood AI scriptwriter.
It's doing fine work. Right, so for listeners who haven't followed this closely, the El Al Dublin to Tel Aviv route was the only direct air bridge between Ireland and Israel, and it got suspended in early this year due to the ongoing situation in the Middle East. And separately, Ryanair had already pulled out entirely, canceling something like twenty-two routes and around a million planned seats for the winter season, citing slot disputes at Ben-Gurion and general uncertainty around Terminal One.
That Ryanair exit is actually a really important data point because Ryanair doesn't walk away from routes lightly. They are a volume operation. If they decided the numbers didn't work even before the security situation deteriorated further, that tells you something about how marginal some of these routes are even under favorable conditions.
Right, and then in March of this year, thirty-seven flights from Ireland to the Middle East were canceled in a single month, affecting somewhere between ten and twelve thousand passengers. So this isn't ancient history. This is a route that was alive and is now not, and the bones of it are still fresh.
Which makes it the ideal lens for what Daniel is really asking about, which is, what does it actually take to build one of these things from scratch? Because when you see a press release that says, such and such airline is pleased to announce new nonstop service between city A and city B, there is a genuinely enormous amount of invisible work behind that sentence. And most of it is not about planes at all.
That's the thing that I think most people miss. The plane is almost the last thing you figure out.
I mean, you need to have an aircraft that can physically make the journey, but yes, operationally and legally, the plane is downstream of about fifteen other decisions. So let's actually get into what those decisions are, because Daniel laid out a really clean framework here. Overfly rights, airport rights at both ends, slot negotiations, and then the financial case. And each of those is its own world.
They're not sequential. That's the thing. You can't just check them off one by one. They're all happening simultaneously and they all have dependencies on each other.
Which is part of why the timeline is what it is. From initial idea to first flight, you are realistically looking at a minimum of twelve months, and that's if everything goes reasonably smoothly. If you're dealing with countries that have complicated bilateral air agreements, or airports that are slot-constrained, or a route that crosses sensitive airspace, you can be looking at eighteen months to two years before the route is even viable to announce.
That's before you've sold a single ticket.
Before you've sold a single ticket. So let's start at the very beginning, because the question of why a route gets proposed at all is more complicated than it sounds. The naive answer is, well, there's demand, people want to fly between these two cities. And that's part of it. But it's not the primary driver in a lot of cases.
Daniel's prompt actually touches on this, the lobbying on both sides. Which already implies that the demand signal alone wasn't enough to make it happen commercially. Somebody had to go and make the case.
And this is one of the big misconceptions about route development, which is that airlines are just sitting there watching passenger demand and then adding flights wherever the numbers look good. In reality, route development is a much more proactive, politically mediated process. You have tourism boards, you have trade organizations, you have diaspora communities, you have chambers of commerce, all of them making the case to airlines that a route should exist. And the airline is not just evaluating whether people will buy tickets. They're evaluating whether the regulatory environment will allow it, whether they can get the slots they need, whether the overfly situation is manageable, and whether the economics stack up when you factor all of that in.
The lobbying for the Israel-Ireland route would have involved, what, the Irish tourism authority, Israeli government bodies, business groups on both sides?
Tourism Ireland has been quite active historically in lobbying for new routes into Dublin and Shannon. And on the Israeli side, the Ministry of Tourism and various diaspora organizations, there's a meaningful Irish-Jewish community and also a significant number of Irish citizens who've settled in Israel, so there's genuine bilateral movement of people. The demand is real. The question was always whether the commercial and regulatory stars could align.
For a while they did, barely, and then they didn't.
Then they really didn't. The timing on the suspension is significant. El Al had been operating the route, and then the security situation deteriorated to the point where it became operationally unviable. And you can see that pattern playing out more broadly. Delta and Air Canada both cut routes that were marginal when jet fuel costs spiked as a result of the regional conflict. So the Israel-Ireland story is in some ways a microcosm of what's happening to a whole cluster of routes that were viable under one set of conditions and aren't under another.
Which raises the question of how you ever plan for that. If you're an airline and you're doing the demand modeling eighteen months out, how do you price in a regional war?
You don't, really. You model scenarios. You have a base case and you have downside scenarios, but the specific shape of a geopolitical shock is not forecastable. What you can do is structure the route launch in a way that limits your exposure if things go wrong, which is part of why a lot of these routes start as seasonal service or with limited frequency before they go to daily or twice-daily. It's essentially a staged commitment.
Test the water with your toe before you jump in.
And that staged approach also interacts with the slot situation, because slots at congested airports are enormously valuable and you don't necessarily get the ones you want on your first application. So starting seasonal or starting with lower frequency can be a way of getting a foot in the door at an airport and then building up your slot portfolio over time.
Okay, so we've established that this is complicated and that the Israel-Ireland route is a really vivid illustration of how it can go wrong. Let's actually go through the mechanics, because I think listeners will find it surprising how much regulatory and diplomatic infrastructure underlies a flight that takes about four and a half hours.
Four hours forty minutes, roughly, depending on the routing.
Which is nothing. That's less time than it takes me to fully wake up in the morning.
I believe that. Okay, so where do you want to start? Overfly rights are probably the most counterintuitive piece for people who haven't thought about it.
The basic principle goes back to the Chicago Convention of nineteen forty-four, which is the foundational international agreement governing civil aviation. And one of the things it established is that every country has complete and exclusive sovereignty over the airspace above its territory. That sounds obvious, but the implication is that an airline cannot fly over a country's territory without that country's permission. And permission is granted through a system of bilateral air service agreements, or sometimes through multilateral frameworks, but mostly bilateral.
If El Al wants to fly from Tel Aviv to Dublin, it has to have the right to transit the airspace of every country its flight path crosses.
Every single one. And the North Atlantic routes from the Middle East to Ireland are not straightforward geographically. You're looking at a path that might go over Turkey, or Greece, or potentially through central European airspace, depending on the routing, and then out over the Atlantic. Each of those countries has to have an agreement in place with Israel, or rather with the state of the airline's registry, which for El Al is Israel, authorizing that transit.
Most of that is already in place through existing agreements, right? You're not starting from zero for every flight.
The global network of bilateral air service agreements is quite dense for established aviation relationships. But there are gaps, and those gaps matter enormously. The most obvious one in the Israeli context is that Israel does not have overfly rights over Saudi Arabia, or at least didn't until very recently, and the normalization discussions have been specifically about opening that airspace. Because if you look at the map, Saudi airspace is sitting right in the way of the most direct routes from Israel to South and East Asia. So El Al has historically had to route around it, which adds flight time and fuel cost.
That's a real commercial disadvantage. If your competitor can fly a more direct routing and you can't, you're either slower or more expensive or both.
The fuel penalty for a longer routing is not trivial. On a long-haul route, adding even forty-five minutes of flight time can add thousands of dollars in fuel cost per flight, and that compounds across hundreds of flights a year. So overfly rights are not just a diplomatic nicety. They are a direct input into the unit economics of a route.
In the Ireland case, the overfly situation was presumably more manageable because you're routing north and west, not through contested airspace.
Right, the European airspace is generally open for Israeli carriers under various agreements, and the Atlantic crossing is handled through ICAO frameworks. But manageable doesn't mean trivial. You still need to file the route, get the necessary authorizations, and deal with any country along the path that might have conditions or restrictions. And if any of those countries closes its airspace, which happened to a significant extent during the escalation in March, your flight either can't operate or has to take a longer diversion that may exceed the range or economics of the aircraft.
Which is exactly what happened with those thirty-seven canceled flights in March.
And it's worth pausing on that number because thirty-seven flights affecting ten to twelve thousand passengers is not a rounding error. Those are people who had plans, who had connections, who had family emergencies or business meetings or medical appointments. The abstraction of airspace closure has very concrete human consequences.
Okay, so overfly rights are the invisible geography of aviation. You need permission to cross every piece of sky. Now let's talk about the airport end of things, because that's a different kind of complexity.
There are really two distinct things bundled together when we talk about airport rights. One is the regulatory authorization to operate at an airport, which is tied back to the bilateral air service agreement framework. The agreement between Israel and Ireland, or between Israel and the European Union through the horizontal agreements, specifies which airlines from each country can operate, on what routes, with what frequency, and with what commercial rights. So there's a licensing layer.
That licensing layer can be quite restrictive. Some bilateral agreements are very open, some are quite limited.
Very much so. The old-school bilateral agreements from the mid-twentieth century often had very specific designations, you know, only this airline and that airline can operate between these two countries, and they can only fly this many times a week. The open skies agreements that became more common from the nineties onward liberalized a lot of that, but they're not universal. And Israel's aviation relationships have historically been complicated by the political situation, which means some of its bilateral agreements are more constrained than you'd expect for a country of its economic size.
Which is a polite way of saying that some countries won't sign a normal air services agreement with Israel.
There are countries where Israeli carriers cannot even overfly, let alone land, for political reasons. So the regulatory environment for Israeli aviation is just harder than for most comparable economies. The Ireland case was actually a relatively clean bilateral relationship, the EU-Israel aviation agreement covers a lot of the framework, but you still have the airport-specific layer to deal with.
That's where slots come in.
That's where slots come in. So even once you have the legal right to operate a route, you need a practical right to use the airport at the times you want. And at slot-coordinated airports, which are airports where demand for runway time exceeds capacity, that practical right is embodied in a slot. A slot is an authorization to use the airport's infrastructure, runway, gate, ground handling, at a specific time. And at the most congested airports, Heathrow, Frankfurt, Amsterdam, Tokyo Haneda, slots are so scarce and so valuable that they are effectively a form of property. Airlines buy and sell them, sometimes for tens of millions of dollars per slot pair.
Dublin, is that a slot-coordinated airport?
Dublin is what you'd call a Level Two airport in the IATA classification system. Level One is uncongested, Level Three is fully coordinated, meaning every movement needs a slot. Level Two is in between, there's some coordination required but it's not as rigid as Heathrow. But Ben-Gurion is where it gets more interesting, because Ben-Gurion has been operating at or near capacity for years, and the slot situation there is constrained. Ryanair's complaint when they pulled out was specifically about unresolved slot issues and uncertainty around Terminal One.
That's not a small thing. If Ryanair can't get the slots they need, they can't operate the schedule they need to make the economics work. You can't run a low-cost carrier model on off-peak slots at inconvenient times.
Ryanair's entire business model depends on high aircraft utilization, which means you need slots at times when you can turn the aircraft around quickly and fill it for the next flight. If you're stuck with a slot at two in the morning because that's all that's available, your utilization drops, your costs per seat go up, and your pricing advantage disappears. So the slot negotiation is not just about getting any slot. It's about getting slots that are operationally usable within your business model.
The slot allocation process itself, how does that work? Who decides who gets what?
There's an international framework managed by IATA, the International Air Transport Association, and most major airports use it. Twice a year, there's a scheduling conference where airlines submit their slot requests for the upcoming season, and a slot coordinator, usually an independent body designated by the airport or the government, tries to match requests to availability. The first principle is historic precedence. If you operated a slot last year, you have the right to keep it this year, provided you used it, and the usage threshold is typically eighty percent, so you have to have actually flown at least eighty percent of the time in that slot to retain it for the next season.
Use it or lose it.
Use it or lose it, yes. Which creates some interesting distortions. During COVID, when demand collapsed, airlines were flying nearly empty planes just to preserve their slots, because if they didn't, they'd lose them. The regulators eventually granted waivers, but the underlying incentive structure is real.
That is absurd. Flying empty planes to keep a piece of paper.
It's a rational response to an irrational system, which is kind of the story of airport slots generally. Anyway, for new entrants or new routes, you're applying for slots that have been handed back or that are newly created by capacity expansions. And the coordinator tries to accommodate requests, but if the airport is congested, you may not get what you asked for. You might get a slot that's an hour earlier or two hours later, which might or might not work for your connecting bank of flights.
For a route like Israel-Ireland, which is a relatively long flight, the timing matters a lot. You want to arrive in Dublin at a time when people can make connections or get to their hotel. You want to depart Tel Aviv at a time that makes sense for the passenger journey.
You want the return timing to work too, because the same aircraft is doing the round trip. So if you arrive in Dublin at a bad time, you're departing at a bad time, and that affects your load factor in both directions. The slot negotiation is really an optimization problem across multiple constraints simultaneously, and you're solving it in a competitive environment where other airlines are trying to solve their own versions of the same problem.
This is the part where I start to feel sympathetic to airline planners. It sounds like a horrible job.
It's a very particular kind of hell. But it's also intellectually interesting if you like constraint satisfaction problems. There's actually quite a lot of sophisticated software now that airlines use to model slot scenarios and forecast the downstream effects on network connectivity. Because remember, for most airlines, a new route is not just about the point-to-point passengers. It's about how the route feeds into and out of their hub network. A passenger flying Tel Aviv to Dublin might be connecting from Bangalore, or they might be connecting onward to New York. So the value of the slot is partly about the direct route and partly about what it enables for the wider network.
Which means the financial modeling for a new route is not just, will enough people pay to fly this specific city pair, it's a much more complex network value calculation.
Much more complex. And this is the other big misconception that Daniel's prompt is pointing at, which is the idea that route decisions are primarily driven by passenger demand on that specific route. Sometimes they are. A very high-demand route between two major cities where there's currently no service, that can be commercially obvious. But a lot of route decisions are driven by network strategy, by the desire to anchor a hub, by the value of connecting flows, by competitive positioning against other airlines. And the Ireland-Israel case had elements of all of that. El Al was trying to establish a connection to the Irish market, but also to position itself for the broader European connectivity that Dublin offers.
There's a tourism component too. Israel has been actively trying to diversify its tourism source markets, and Ireland is a market that historically had almost no direct access to Israel.
Right, and that's where the lobbying piece becomes really important. The Irish tourism authority and their Israeli counterparts could make a credible case that there was suppressed demand, meaning people who would travel if there was a direct flight but who weren't traveling because the connections through London or Amsterdam or Frankfurt added too much friction. Suppressed demand is a real phenomenon in aviation. When a new direct route opens, you often see total traffic on that city pair grow significantly, not just because you've captured existing connecting passengers, but because you've unlocked latent demand from people who just weren't going to bother with a connection.
The route itself creates some of its own demand.
It's one of the more counterintuitive things in aviation economics. The act of offering the service changes the demand landscape. And that's both an argument for launching a route and a complication for modeling it, because you're trying to forecast demand for a product that doesn't yet exist.
Which is why airlines are cautious about new routes, and also why they sometimes get them wrong in both directions. They underestimate demand and the route takes off, or they overestimate it and it's a disaster.
The Israel-Ireland route, I think, had a complicated demand story. The underlying bilateral flows, diaspora travel, tourism, business, are real. But the route was always going to be sensitive to the security situation in a way that, say, a Dublin to New York route is not. And when the situation deteriorated, the demand signal that the route was built on changed very quickly.
You've done the overfly work, negotiated the slots, and secured the regulatory authorizations. Now comes the critical question: does this actually make financial sense?
That's really the crux of it. Everything we've discussed—the bilateral agreements, the overfly rights, the slot negotiations, the regulatory authorizations—all of that is just the permission structure. It tells you what you're allowed to do. The financial question is whether you should actually do it.
When people read a headline saying "new direct route announced between city A and city B," what they're not seeing is the years of work that produced that headline.
A route announcement is the end of one process and the beginning of another. The announcement itself is usually the point at which the airline has cleared enough of the regulatory and logistical hurdles that they're confident enough to go public. But the underlying work started long before that, and the operational work, actually making the route profitable, starts after.
At its core, what is a new route really? Like, what does the airline actually have to assemble?
At minimum, four things. You need the legal right to operate, which is the bilateral agreement and traffic rights layer. You need the operational right to use the airports at viable times, which is the slot layer. You need the physical and logistical infrastructure at both ends, ground handling, check-in facilities, crew positioning, maintenance coverage. And then you need a financial model that says the revenue you can reasonably expect to generate exceeds the costs you'll incur, with enough margin to justify the capital tied up in the aircraft.
Those four things are not independent. A bad slot undermines the financial model. A weak bilateral framework constrains which airports you can even consider.
They're deeply interdependent, and that's what makes route planning hard. You're not solving four separate problems sequentially. You're solving one interconnected problem where a constraint in any one dimension can collapse the whole thing.
Which is a good frame for where we're going next.
Let's actually pull on the overfly thread, because I think it's the one that gets the least attention and does the most hidden work.
It really does. And the reason it gets ignored is that it's invisible to passengers. You book a flight, you get on a plane, the plane flies over countries you never think about, and you land. But from the airline's perspective, every country whose airspace you transit has to have said yes before you can file that route commercially.
For Israel specifically, the geography is brutal. You're flying out of a country that has historically been unable to use the most direct paths because of which neighbors are on the other side of the fence.
The classic case is Saudi Arabia. For decades, Israeli-registered aircraft couldn't overfly Saudi airspace at all, which means routes to Asia and parts of Africa had to go the long way around, adding hours and fuel costs. The Abraham Accords opened up some of that, and El Al's ability to operate routes that were previously impossible or economically marginal improved meaningfully after twenty twenty. But the overfly situation is still not simple, and it's not static.
How does an airline actually secure an overfly right? What's the mechanism?
Overfly rights sit within a broader framework of bilateral air service agreements, which are government-to-government treaties that establish the terms under which airlines from each country can operate in the other's airspace and airports. The overfly component specifically is usually handled through what's called an overflight permit, and the process varies by country. Some countries have standing arrangements through ICAO, the International Civil Aviation Organization, where any airline from a signatory state can apply for a permit and get it relatively routinely. Other countries treat overflight permissions much more discretionally, and the airline has to go through its own government, which then negotiates with the foreign government, and the timeline on that can stretch to eighteen months or more depending on the diplomatic relationship.
Eighteen months just to fly over someone's territory.
Just to fly over. And the complication for a route like Israel to Ireland is that you have to secure permissions from every country in between. The most direct routing would take you over the eastern Mediterranean, across parts of southern Europe, and then up through France or the UK into Ireland. Most of those are straightforward. But if the optimal routing takes you over a country that has a complicated relationship with Israel, or a country that's currently in some kind of airspace restriction status, you have to reroute, and rerouting adds distance, adds fuel, potentially pushes your flight time over certain regulatory thresholds that trigger crew rest requirements.
A diplomatic hiccup in a country you're just flying over can add an hour to a flight.
And it can add meaningful cost. Jet fuel is the single largest operating expense for most airlines, typically thirty to forty percent of total operating costs on a medium to long haul route. So a routing that's two hundred nautical miles longer than the optimal path isn't a trivial inconvenience. It's a structural cost disadvantage relative to a competitor who has better overfly access.
You can't hedge that easily. You can't just lock in a better routing if you don't have the diplomatic relationship to support it.
And this is where the geopolitical dimension becomes operational. It's not just that political tensions are bad for passenger sentiment, though they are. It's that they directly affect the physical path the aircraft can take, which affects costs, which affects whether the route is viable at all. The Israel-Ireland case had this embedded in it from the start. El Al was operating in an environment where its routing options were more constrained than those of a European carrier doing the same city pair in reverse.
Which is an asymmetry that's easy to miss. An Aer Lingus or a Ryanair flying the same route has different overfly options than El Al.
A carrier registered in a neutral European country may have more permissive overflight access in certain regions. And that's a real competitive disadvantage for El Al on some routes. Now, for the Ireland route specifically, the routing was mostly over relatively benign airspace, so the overfly issue was not the primary constraint. But it's illustrative of the broader challenge.
Once you've sorted the overfly picture, you're dealing with the airports themselves. And that's a separate layer of permissions and negotiations.
Separate and in some ways more complex, because now you're dealing with multiple entities simultaneously. At each airport, you need what's called traffic rights, which determine whether you're allowed to carry passengers commercially on this route from this airport. Under the bilateral air service agreement framework, these are usually defined in terms of freedoms of the air, which is a specific international classification system. Third freedom, fourth freedom, fifth freedom, and so on. Each one defines a different type of commercial right.
Break those down briefly, because I think the numbering system makes people's eyes glaze over.
Third freedom is the right to carry passengers from your home country to a foreign country. So El Al carrying passengers from Tel Aviv to Dublin. Fourth freedom is the reverse, carrying passengers from the foreign country back to your home country. So El Al carrying passengers from Dublin to Tel Aviv. Most bilateral agreements cover both, because otherwise you'd have airlines flying empty in one direction. Fifth freedom is more interesting and more contested. That's the right to carry passengers between two foreign countries, with one stop in your home country. So El Al could theoretically carry passengers from Dublin to a third country via Tel Aviv, or vice versa.
Which is why Gulf carriers were so disruptive when they started expanding. Emirates flying London to Dubai to Sydney is fifth freedom, and it undercut carriers that were doing London to Sydney direct.
And fifth freedom rights are often the subject of intense political negotiation because incumbent carriers lobby hard to restrict them. The US-EU open skies agreement liberalized a lot of this, but it's still a point of friction in many bilateral relationships.
For Israel specifically, the fifth freedom question is interesting because of where Tel Aviv sits geographically. It's a natural transit point between Europe and parts of Asia and Africa.
Which is part of why Ben-Gurion has historically punched above its weight as a hub relative to Israel's population size. El Al and the Israeli government have been trying to develop that transit function, but it requires the right bilateral agreements to enable fifth freedom operations, and those are harder to get than basic third and fourth freedom rights.
You've got your traffic rights. What else do you need from the airports themselves?
Ground handling arrangements, which sounds mundane but is operationally critical. You need someone at each airport to handle the aircraft on the ground, check in passengers, load baggage, refuel, do the turnaround. At major airports, there are usually multiple ground handling companies competing for business, but at smaller or more specialized airports, there may be a monopoly provider, which affects your cost structure. You need access to gates and terminal facilities. You need arrangements for cargo handling if you're carrying belly freight, which most passenger aircraft do because it's additional revenue on space you're paying for anyway. And you need crew positioning, which means you need a way to get your pilots and cabin crew to the airport at the right time, which may require positioning flights or crew hotel arrangements.
For a new route, none of that infrastructure exists yet. You're building it from scratch at the destination end.
At the destination end, yes. El Al setting up in Dublin had to establish all of those relationships, negotiate contracts with ground handlers, sort out the crew logistics, figure out where their aircraft would be maintained if something went wrong overnight. Because if an aircraft goes technical in Dublin at eleven pm, you need a plan for how you get it fixed or how you reaccommodate the passengers who were supposed to fly home the next morning.
That maintenance coverage question is not trivial for an airline whose main technical base is seven thousand kilometers away.
Not trivial at all. Line maintenance, the routine checks that happen at outstations, can usually be contracted to a local maintenance provider. But anything more serious, a component failure, a heavy check requirement, you're either ferrying the aircraft back to your main base or you've got a very expensive problem on your hands. And the cost of that contingency planning has to be baked into the route economics from the beginning.
When Ryanair cited slot issues and Terminal One uncertainty as reasons for pulling out of Israel entirely, those were not pretexts. They were the operational foundation collapsing.
The Jerusalem Post had the detail on this, the twenty-two routes and roughly one million planned seats for the winter season just gone. And when you read between the lines of what Ryanair was saying, the Terminal One situation at Ben-Gurion was critical because Ryanair's whole model depends on fast turnarounds, and the terminal configuration directly affects how quickly you can turn an aircraft. If you can't get the turnaround time you need, your utilization drops, and suddenly the economics of operating in that market don't work for a low-cost carrier.
Ryanair walking away from a million seats is not a small thing for the Israeli aviation market.
It's enormous. Ryanair is typically the largest carrier by volume at any airport it operates. Their exit doesn't just affect the routes they were flying. It affects the competitive dynamics on every route they were competing on, which means fares go up, which means some demand gets suppressed, which makes it harder for other carriers to justify expanding. The whole ecosystem takes a hit.
Which loops back to the slot question in a slightly different way. Because if Ryanair's slots at Ben-Gurion get returned to the pool, theoretically that creates opportunity for other carriers. But in practice, if the airport is in operational uncertainty, nobody else is rushing to pick those slots up.
A slot is only valuable in the context of a functioning, predictable operating environment. If you don't know what the terminal situation is going to look like six months from now, the slot is more of a liability than an asset, because you might win the slot in the scheduling conference and then find yourself unable to operate it effectively—which only adds to the financial uncertainty.
And that’s why the financial picture going in is already complicated before you've sold a single ticket.
That's the part that I think gets the least coverage when a new route is announced. Everyone focuses on the ribbon-cutting, the first flight, the press release. Nobody is writing about the revenue model that justified the decision in the first place, or the triggers that will cause the airline to walk away.
Walk me through how an airline actually builds that model. What does the forecasting look like before they commit?
The starting point is demand estimation, which sounds straightforward but is difficult for a route that doesn't exist yet. You're trying to estimate how many people would fly between two cities if a direct option existed, knowing that some of those people are currently flying via a connection, some are not flying at all because the connection is too inconvenient, and some would shift from other transport modes. For a route like Dublin to Tel Aviv, you'd be looking at things like the size of the Irish Jewish and Israeli diaspora communities, the volume of business travel between Ireland's tech sector and Israel's tech sector, tourism flows in both directions, and the number of people currently booking connecting itineraries through London or Amsterdam or Frankfurt.
That last category is interesting because those passengers are already revenue for other carriers. You're essentially trying to pull them onto your metal instead.
Right, and those carriers know you're coming. When El Al started operating to Dublin, you can be certain that Aer Lingus and British Airways and KLM were watching their Dublin-Tel Aviv connecting bookings very carefully. Because if El Al is capturing that traffic, it's coming directly out of the revenue those carriers were earning on the connecting segments.
Which gives the incumbents an incentive to compete aggressively on price, at least initially.
And that's a deliberate strategy in some cases. If you can price the connecting itinerary low enough to undercut the new direct service for the first year, you might be able to suppress the new route's load factors enough that it looks financially unviable, and the new entrant pulls out. Then you raise prices again. It's not a conspiracy theory, it's a documented competitive dynamic in aviation.
You're forecasting into a market that your competitors have an active interest in making look worse than it is.
Which is why airlines don't just look at their own projected revenues in isolation. They're also modeling the competitive response. And that model has to account for the possibility that a competitor will price below their own cost of service for a period of time just to make your route look bad.
Then on top of that, you've got the fuel variable, which is basically impossible to forecast with any precision.
Jet fuel is the thing that makes aviation financial modeling feel slightly absurd. You can have a route that looks profitable at forty dollars a barrel and is deeply underwater at eighty. And the range between those two numbers is not hypothetical, it's the actual range that oil prices have moved through within a single year in recent history. The CBS News piece flagged this in the context of what Delta and Air Canada were doing with their route networks, cutting marginal routes specifically because the fuel cost assumption that justified those routes no longer held. When fuel costs spike, the routes that are barely profitable become the first to go, because the airline needs to redeploy that capacity onto routes with stronger unit economics.
A route like Dublin-Tel Aviv is not a high-frequency trunk route. It's probably two or three frequencies a week at best, which means your fixed costs per flight are spread across fewer seats.
That's exactly the unit economics problem. A route between two major hubs that's operating daily or twice daily can amortize the ground handling contracts, the crew positioning costs, the slot fees, across a much larger number of passenger-revenue units. A thin route with three weekly frequencies has those same fixed costs spread across maybe a third of the flying. So your break-even load factor is higher, which means you need to fill a larger percentage of the aircraft on every single flight just to cover costs, before you've made a dollar of profit.
What does break-even look like in practice for a route like that?
It varies enormously by aircraft type and cost structure, but for a medium haul route with limited frequency, you're probably looking at a break-even load factor somewhere in the range of seventy-five to eighty-five percent. Which sounds achievable until you factor in that you're going to have some flights that are thirty percent full because they depart on a Tuesday morning in February, and you're going to have some flights that are a hundred and five percent sold because they depart on a Friday afternoon in July. The average has to work, but the variance is what kills you operationally.
The monitoring process once the route is live, how does that work? Are we talking weekly revenue reports, or is there something more granular?
Much more granular. Modern revenue management systems are tracking booking pace in real time, meaning how quickly seats are selling relative to historical patterns or modeled expectations for each departure. If a flight that's ninety days out should be, say, forty percent booked based on the model, and it's actually twenty-two percent booked, that's a signal that something is wrong, whether it's the pricing, the marketing, the timing, or the underlying demand assumption. The airline will then make adjustments, dropping fares to stimulate bookings, shifting the distribution strategy, maybe running targeted promotions in specific markets.
The revenue management team is essentially running a continuous experiment on every flight.
Every single flight, every single day. And for a new route, the first six months of data are extraordinarily valuable because you're calibrating your model against reality for the first time. You discover which day-of-week patterns actually hold, whether your seasonal assumptions were right, whether the business travel you expected is materializing or whether it's mostly leisure passengers who are more price-sensitive.
Which is what makes the El Al Dublin situation so instructive, because the route ran for a period and then got suspended. And when you look at the timing, the suspension happened as regional tensions were escalating. So you never really got a clean read on whether the underlying demand was there.
That's the tragedy of it analytically. The route was contaminated by external events before you could establish a genuine baseline. The demand signal you were getting in the final months of operation was not a signal about the Ireland-Israel travel market in normal conditions. It was a signal about that market during a period of active regional conflict, airspace closures, and genuine passenger uncertainty about whether flying to or from Israel was safe or even possible. The RTÉ reporting had the numbers on this, thirty-seven flights from Ireland to the Middle East canceled in early this year, ten to twelve thousand passengers affected as airspace closures spread following the US-Israeli strikes on Iran. That is not a data environment in which you can draw conclusions about long-term route viability.
The airline is in an impossible position. You can't keep flying a route that's losing money because of circumstances outside your control, but you also can't know whether those circumstances are temporary or permanent.
That decision point is where the route wrap-up process begins. It's not usually a single dramatic announcement. It's a gradual withdrawal of capacity, first reducing frequencies, then shifting to seasonal operation, then suspending indefinitely, which is the language airlines use when they want to leave the door open to returning without committing to anything. The difference between a suspension and a cancellation is mostly legal and contractual. A suspension lets you hold onto your slots, depending on the airport's use-it-or-lose-it rules. A cancellation means you're giving them up.
Ryanair went straight to cancellation, not suspension.
Which tells you something about their assessment of the timeline. When Ryanair pulls out of a market, they're not usually planning to come back in six months. They made a judgment that the operational environment at Ben-Gurion was not going to resolve quickly enough to justify holding the positions. Twenty-two routes and a million seats is a decisive exit, not a tactical pause.
The knock-on effect for any future route development between Ireland and Israel is significant. Because now you've got to rebuild the whole case from the ground up, in a market that just had a high-profile failure.
That's the reputational dimension of route cancellation that doesn't get enough attention. When a route fails, it doesn't just affect that airline. It affects the market's attractiveness to every other carrier that might have been considering it. The next airline that does the analysis on Dublin-Tel Aviv is going to look at the El Al suspension and the Ryanair exit and factor that into their risk assessment. It raises the hurdle. You need a more compelling demand case, a more favorable cost environment, a more stable geopolitical picture before you can justify committing.
Which means the lobbying cycle has to start again. The tourism boards, the diaspora groups, the trade organizations, all of them making the case that the demand is real and the timing is right.
They'll be making that case into a headwind, because the carriers they're talking to have recent evidence that the market is difficult. The gap between the next serious route proposal and where we are now is probably years, not months, assuming the regional situation stabilizes.
Right, and with that timeline in mind, what does someone actually do with this information? Because the picture we've painted is pretty bleak. Years of lobbying, regulatory complexity, geopolitical exposure, and even when you get the route, it might disappear before you've established a clean demand signal.
The bleakness is real, but there are things that actually move the needle, and they're not complicated in principle, even if they're hard in practice. The first one is stakeholder engagement, and specifically the timing of it. The routes that succeed are almost always the ones where the lobbying started years before anyone filed a regulatory application. Tourism Ireland was making the case for Israel connectivity long before El Al operated a single Dublin flight. The Irish-Jewish community, trade bodies, university exchange programs, they were all building a documented demand case. That paper trail matters enormously when an airline's network planning team is deciding which routes to put into the feasibility model.
It's not enough to show up when the airline is already considering the route. You need to have been building the case before they're even thinking about it.
You need to keep building it even after a failure. The instinct after a cancellation is to go quiet, because the news is bad. But that's exactly the wrong moment to go quiet. The lobbying groups that stay organized and keep producing demand data through a period of route absence are the ones that shorten the gap to the next attempt.
The second thing you mentioned was financial flexibility.
Which is really about airlines being honest with themselves about what kind of route this is. Not every route is a trunk route. Some routes are strategic, some are seasonal, some are community-service routes that need a different financial model from the start. The mistake is treating a Dublin-Tel Aviv as if it should perform like a London-New York. The break-even assumptions, the frequency expectations, the load factor targets, all of those have to be calibrated to the actual market, not to the airline's standard financial template.
For listeners who actually want to advocate for a route in their own community?
Write to the airline.. Network planning teams do read organized community submissions, especially when they come with data. Passenger counts from connecting itineraries, survey results on unmet demand, letters from local businesses that would benefit. It is not glamorous work, but it is exactly the kind of documented demand signal that moves a route from the bottom of the feasibility list to the top. Still, even with that groundwork, the bigger question remains: how do airlines plan for routes like this one when the geopolitical landscape itself is so uncertain?
That’s what’s sitting with me too—what the next five to ten years actually look like for these routes. The geopolitical picture isn’t stable, and it’s not obviously trending toward stability. So how does an airline even begin to plan in that environment?
That's the open question I don't think anyone has a clean answer to. The traditional route planning model assumes that political conditions are inputs you can roughly forecast. You model a scenario where tensions are elevated and a scenario where they're normalized, and you weight them by probability, and you make a call. What we've seen with Israel over the past couple of years is that the variance on those scenarios is so wide that the model becomes almost meaningless. You're not forecasting a range, you're forecasting an entirely different world depending on which scenario materializes.
Which is an argument for technology doing more of the heavy lifting, because human forecasters are not well-equipped to handle that kind of uncertainty.
There's actually some interesting work happening in this space. Airlines are starting to use machine learning models that can incorporate real-time signals, news sentiment, booking cancellation rates, foreign ministry travel advisories, even social media patterns, and update their demand forecasts dynamically rather than on a quarterly planning cycle. The idea is that your revenue management system is not just tracking whether seats are selling, it's trying to anticipate demand shocks before they fully materialize in the booking data.
The system sees the diplomatic temperature dropping and starts adjusting yield targets before the passengers have canceled.
The practical implementation is still pretty early. But the direction is clear. Route planning is becoming less of an annual strategic exercise and more of a continuous adaptive process. Which, for a market like Israel-Ireland, might actually be the only viable model. You need a system that can respond quickly enough to be useful, not one that's locked into assumptions made eighteen months ago.
The irony being that the route that most needs that kind of adaptive management is also the route that's currently not operating, so there's nothing to manage.
Which brings us back to where we started. The air bridge between Ireland and Israel is not gone permanently. It's paused, under conditions that are difficult to forecast. The infrastructure for the argument still exists. The diaspora communities, the trade relationships, the tourism interest, none of that has dissolved. The question is whether the political and operational environment gets to a place where someone is willing to make the bet again.
When they do, they'll be starting from a stronger evidence base than El Al had, because this route has now been attempted, operated, and failed in documented fashion, which is actually useful information if you're willing to read it honestly.
That's a optimistic way to frame a cancellation.
I've had practice. Hilbert Flumingtop, our producer, deserves real credit for this one. Routes, lobbying cycles, slot politics, it's a lot to structure into a coherent episode, and he did it. And a quick thanks to Modal for keeping the infrastructure running behind the scenes. This has been My Weird Prompts. If you've been enjoying the show, a review on Spotify goes a long way. We'll see you next time.
