Muscat: Delta and United Airlines declared the cancellation of their flights to Tel Aviv until August 2 and 6, respectively, according to Fortune Arabic. This decision, prompted by rising expectations of major attacks on Israel, comes amid heightened tensions in the region involving Hezbollah and Iran. The Hebrew media has reported that these cancellations have stranded tens of thousands of Israelis in the United States. This disruption by the world’s second and third largest airlines, respectively, could potentially lead to further cancellations by other carriers, as reported by Haaretz.

The cancellations follow similar actions by German airline Lufthansa earlier this week, which halted two overnight flights from Frankfurt and Munich to Israel. Lufthansa Group, which includes SWISS, Austrian, Brussels Airlines, and Eurowings, also participated in this suspension. British Airways and Flydubai have joined the list of airlines cancelling flights to Israel, as reported by Yedioth Ahronoth.

The impact on travel to Israel has been severe, with the Israeli statistics agency reporting a 76% drop in travel during the first half of 2024. The Israel Hotel Association (IHA) highlighted the dire financial distress facing the tourism and hospitality sector, with about 10% of hotels at risk of financial collapse due to plummeting occupancy rates since the start of the war on Gaza. Hotels in regions such as the Red Sea and Eilat are maintaining high occupancy rates by hosting Israelis displaced by the conflict, while those along the northern border have been closed for months.

The prolonged war in Gaza has also taken a toll on Israeli businesses, with an estimated 60,000 companies expected to shut down in 2024, following the closure of 46,000 companies in the previous nine months. High interest rates, rising financing costs, labour shortages, declining revenues, logistical disruptions, and insufficient government aid have exacerbated the situation.

The tourism sector in regions like Galilee and northern Israel, which are experiencing daily conflicts with Hezbollah, is described as being in a state of collapse. According to the Israeli Central Bureau of Statistics, tourist arrivals between January and April 2024 plummeted to 288,000, an 80% drop from 1.3 million in the same period in 2023.

These aviation disruptions have broader implications for Israel’s economy, including a significant decrease in foreign investment and business activities. According to the Israel Innovation Authority, the country saw a 29% decline in foreign investment in 2023, from $23 billion to $16.4 billion, and a 55% drop in investments in Israeli startups.