Israeli Airlines Reach Record Revenues Amid Foreign Carrier Cancellations

Despite the ongoing security challenges facing Israel, the country’s airlines are experiencing unprecedented financial success. Recent data from Shva, Israel’s national payment infrastructure provider, reveal that domestic airlines broke revenue records in May 2025, highlighting the resilience and adaptability of the Israeli economy.

Israeli credit card spending on local airlines soared to $145.7 million in May, marking a remarkable 21% increase from the same period last year. This builds on the previous record set in May 2024, when revenues reached $120 million.

The surge is largely attributed to foreign airlines canceling flights to and from Israel due to escalating regional tensions, including the recent Houthi missile attack on Ben Gurion Airport and the ongoing conflict in Gaza. As international carriers scale back operations, Israeli travelers are turning to homegrown airlines such as El Al, Arkia, Israir, and Air Haifa. Two foreign airlines with Israeli ownership TUS of Cyprus and Greece’s Blue Bird also contributed to the record revenues.

While seasonal factors may play a minor role, the primary driver is clear: security concerns have led Israelis to rely on domestic carriers, keeping vital air travel routes open despite foreign withdrawals. Shva’s data only reflect purchases made with Israeli credit cards, suggesting that actual revenues could be even higher when considering international bookings handled by Israeli airlines.

The positive trend isn't limited to aviation. Israel’s hotel sector, which suffered during the pandemic and the early stages of the war in Gaza and Lebanon, is showing strong signs of recovery. Credit card spending on hotel accommodations surged 47% year-over-year in May 2025, reaching $242.4 million. The increase reflects both a rise in domestic tourism and government support measures.

With many Israelis opting for staycations amid travel uncertainties, local hotels have become a preferred option. Additionally, the government’s decision to issue credit card vouchers for accommodations to reservists in April provided a further boost. Approximately $13.5 million, or 5.5% of May’s hotel spending, was attributed to these vouchers.

Israel’s ability to turn adversity into opportunity is once again on full display. As foreign airlines hesitate, Israelis are stepping up to support their national carriers and hospitality industry, keeping the economy vibrant and demonstrating an unshakable commitment to national strength and self-reliance.

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