American Airlines to resume flights to Israel amid Gaza ceasefire

American Airlines will resume its New York JFK to Tel Aviv flights on March 28, following a halt initiated after the October 7, 2023 attack, joining rivals Delta and United who have already restarted service. This move, alongside other foreign carriers returning to Israel, signals a perceived stabilization of the security situation and is expected to intensify competition in the air travel market. This increased competition is already reflected in El Al's declining market share, suggesting a normalization of airfares after a period of limited supply.

Analysis

American Airlines (AAL) is set to resume its New York JFK to Tel Aviv flights on March 28, joining rivals Delta (DAL) and United (UAL) who have already reinstated service. This resumption, following a halt since October 7, 2023, is part of a broader trend with other foreign carriers like British Airways, SAS, Iberia, and Swiss also returning, signaling a perceived stabilization of the security situation after a U.S.-brokered ceasefire. This collective return marks a significant normalization of international air travel to Israel.

The re-entry of these major airlines is intensifying competition within the Israeli air travel market, directly impacting the market share of local carriers. El Al Israel Airlines, which previously dominated during the period of reduced foreign flights, has seen its market share drop to 32.5% from 44% a year earlier. This increased competition is expected to normalize airfares, which had soared due to limited supply.

Despite the heightened competition, passenger traffic at Ben Gurion International Airport near Tel Aviv demonstrated robust growth, increasing 25% over the first nine months of 2025 to 13.6 million. This strong underlying demand supports the strategic expansion by U.S. carriers, with United (UAL) planning additional flights from Washington and Chicago, indicating a positive long-term outlook for passenger volumes on these routes.

Key Decisions for Investors

• Monitor El Al's (LY) profitability and market share as increased competition from U.S. and European carriers pressures pricing.
• Evaluate the long-term stability of the geopolitical situation in the region, as sustained peace is crucial for continued travel demand and operational consistency.
• Assess the capacity expansion plans of American (AAL), Delta (DAL), and United (UAL) for their potential to capture market share and contribute to their international segment growth.