A regulatory bypass route? The expected obstacle in the Arkia-Israir deal

Globes reveals: Israir is in talks to acquire Arkia. The deal is expected to face regulatory difficulty with the Competition Authority, which will need to approve a merger between competitors. The 'failing firm' doctrine may help, but experts note that Arkia does not meet its required conditions.

Globes reveals that Israir, controlled by Rami Levy, is in talks to acquire rival Arkia. The deal is expected to face regulatory hurdles, primarily with the Competition Authority, which will need to approve a merger between two competitors. However, the 'failing firm' doctrine may allow approval if Arkia proves it is in a state of insolvency. Arkia lost about $30 million in the first three quarters of the year and is expected to lose $50–60 million for the full year. Experts, including attorneys Dror Strum and Hagai Doron, note that the lack of a formal tender or a 'going concern' qualification in its financial statements complicates approval. The Authority will examine the impact on competition on the Eilat route, where Arkia and Israir together hold 97% of traffic, as well as on international routes. On the other hand, some argue the merger would create competitive power against the dominant El Al.