Shares of El Al Israel Airlines surged as much as 9.5% to ILS 1,850 on September 30, after a Flydubai flight bound for Tel Aviv was diverted to Saudi Arabia due to a cockpit incident, prompting investors to bet that Israeli travelers would flock to their national carrier. A Rival's Midair Terror Scare Hands El Al a Windfall — But Can One Incident Reshape Israel's Aviation Market?

Shares of El Al Israel Airlines surged 9.5% to ILS 1,850 on September 30 after a Flydubai co-pilot allegedly stabbed the captain and attempted to crash a Boeing 737 MAX carrying 174 mostly Israeli passengers from Dubai to Tel Aviv. Israeli Prime Minister Netanyahu called it "a most serious security incident," and the aircraft plummeted 17,400 feet in less than two minutes before reserve pilots and passengers subdued the attacker and diverted to Saudi Arabia. The market's message was immediate: Israeli travelers spooked by a foreign carrier's catastrophic security failure will pay more to fly their own flag.

  • A Competitor Grounded Means an Open Route Flydubai has temporarily suspended all flights to and from Israel while the investigation continues. The airline operates daily return flights between Dubai and Tel Aviv, often around 10 per day — a route that became Flydubai's near-monopoly after Israeli carriers were barred from the UAE corridor for eight months over security disputes. Gulf-based airlines had been "the sole operators in the market, enjoying a significant surge in passenger volume." Every day those flights stay grounded, El Al is the most obvious beneficiary.

  • El Al Moved Fast to Capture the Demand Within hours of the incident, El Al said it received "numerous inquiries from Israelis abroad wishing to return home" and opened a dedicated WhatsApp line for rebooking passengers from any destination.

The airline is also preparing a special flight from Bangkok to bring stranded Israelis home on an Israeli carrier. More critically, El Al announced preparations to resume its Tel Aviv–Dubai route in November with at least two daily flights, potentially capturing a high-margin corridor it lost months ago.

  • The Stock Is at Record Highs — Raising the Bar El Al's market capitalization now stands at roughly ILS 10 billion, an all-time high.

Both El Al and Israir recorded unusually high trading volumes — roughly 3.5 times their daily average over the past year. That kind of spike often reflects speculative positioning rather than repriced fundamentals. The risk: Flydubai eventually resumes service, the demand surge fades, and today's premium unwinds.

  • Security Politics Could Help — or Complicate — the Story Israel's Transportation Minister is calling on the Shin Bet to let Israeli airlines resume Dubai flights while simultaneously freezing Flydubai's route pending a security review.

Regulators are also examining whether the UAE violated a 2020 aviation agreement requiring crews to hold passports from countries with Israeli diplomatic ties. If those political winds hold, El Al gains a structural advantage. If they don't, Wednesday's rally may prove to be a one-day trade dressed up as a thesis.