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Major economic hit expected for Israel from Gaza conflict

Major economic hit expected for Israel from Gaza conflict
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The human price being paid is massive, and the economic cost of Israel’s ‘Operation Protective Edge’ is already being felt with more effects to come.

El Al Israel Airlines reports numerous cancellations and it expects the conflict in Gaza to reduce the company’s revenue by up to $50 million.

Some European airlines had already decided not to fly into Tel Aviv airport, even before Europe’s aviation regulator told them not to, while US carriers were ordered not to go there by the Federal Aviation Authority, despite assurances from Israel.

Ofer Leffler, spokesman for the Israel Airports Authority, said: “Ben Gurion airport is the safe[est] place on earth, it is the safe[est] place in Israel. Right now there are around 80 flights that [were] cancelled… to Israel. And we hope in the next few hours, the FAA is going to change their decision and they are going to fly back to Israel.”

Israel’s finance ministry has not given out any figures, but local media are reporting the cost of fighting at over $32 million dollars a day (23.8 million euros).

The tourism industry will be hard hit. The Israel Hotel Association estimates tourism revenue losses in the third quarter of the year will be around five hundred million dollars. It said visitor numbers will be down by 35 percent.

Israeli tourism was on track for another record year in 2014, but in the longer term there will be reluctance by visitors to return.

Israel’s credit rating could also be reduced making it more expensive for the government to borrow money.