Israir in preliminary talks to buy rival Arkia, Reuters reports

what happened

Israeli airline Israir is in preliminary talks to acquire its main domestic rival Arkia, Reuters reports, citing a letter from chief executive Uri Sirkis to staff. He said Israir has invested more heavily in infrastructure, technology and growth, including buying eight aircraft and forming hotel partnerships, which makes it a serious potential buyer.

Sirkis said a combined group would compete on price and service with the major international airlines flying to Israel and would generate significant annual savings in operating costs. Israir is valued at $144 million. Local media report that Arkia lost $30 million over the first three quarters of 2026, but as a private company it does not publish its financial results. Arkia's owners, the Nakash brothers, said they are working to pull the company out of its crisis.

why it matters

For markets, the deal is an example of consolidation in Israel's aviation sector, where flag carrier El Al is the largest player. A merger could reshape domestic and European routes and strengthen local carriers against foreign competitors. The talks are still preliminary, so their practical impact on the sector is unclear.

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