Israeli airline Israir is in preliminary talks to buy its main local rival Arkia in a bid to better compete against foreign carriers, Chief Executive Uri Sirkis said in a letter to staff.
Local media have reported that privately owned Arkia has recently suffered a loss, and though its results have not been published its owners said the airline had fallen into a "crisis" and they were working to find a solution.
Arkia stressed "its operations continue as usual" and it was "looking forward, making the adjustments required by a changing reality, maintaining operational stability, and continuing to develop its activity."
Israir, valued at $144 million, and privately held Arkia are the second- and third-largest Israeli airlines behind flag carrier El Al.
In a letter to employees over the weekend seen by Reuters, Sirkis said that while Arkia is a worthy and respected competitor, Israir has invested more heavily in infrastructure, technology, and future development – including the purchase of eight aircraft, forming partnerships with hotels, and taking a stake in a credit card firm.
"That gives us a significant advantage today," Sirkis said. "All these investments together place us as a significant potential buyer. Now there is an opportunity to leverage this infrastructure."
Israir aims to carry 3.5 million passengers by 2030
He noted that Israir aims to carry 3.5 million passengers by 2030, with a fleet of some 20 aircraft.
"If the move is approved.. we will create an amazing aviation group that will compete on price and service against the major international airlines operating in Israel," Sirkis said, adding it would create "significant annual savings in operating expenses and allow us to build a real competitive challenger under the Israeli flag."
"This is not a takeover move; it is a move to strengthen Israeli aviation. It is a move that secures the future of all of us, of Israir and of Arkia alike" and "could change the map of Israeli aviation."
Israir holds a 12% market share of passengers using Ben-Gurion Airport near Tel Aviv so far in 2026, while Arkia has nearly 11%. They have traditionally mainly operated on domestic routes and to Europe, but recently both have begun longer-haul flights to New York.
Arkia also now flies to destinations in Asia, such as Thailand and Vietnam, and plans flights to the Philippines starting in January.
Arkia reportedly loses $30 million in 2026
Israeli media have reported that Arkia made a loss of $30 million over the first three quarters of 2026, though Arkia says that as a private company it does not publish its financial results, so data are not official. Media also reported that its owners were considering a capital injection.
Arkia is owned by the Nakash brothers, who said in a statement: "The Nakash Group is working to find solutions to the crisis Arkia has fallen into, with the aim of rehabilitating the company and bringing about its recovery. Its approach is uncompromising, professional, and long-term, with the well-being of passengers and employees at the forefront."