Europe’s largest budget airline, Ryanair, is on the verge of making a dramatic exit from Israel, a move that could have profound implications for the country’s already beleaguered aviation sector and wider economy. The warning comes directly from Ryanair CEO Michael O’Leary, who, during the company’s annual general meeting on September 12, 2025, signaled that the airline may not return to Israel even after the violence tied to the Gaza war subsides. The root of the dispute? A combination of fee disagreements with Israeli airport authorities and the ongoing chaos caused by the conflict itself.
O’Leary did not mince words when addressing the issue. Speaking to journalists in Dublin, he said, “I think there’s a real possibility that we won’t bother going back to Israel… when the current violence recedes.” He continued, “Unless the Israelis kind of get their act together and stop messing us around, frankly, we have far more growth elsewhere in Europe.” According to Reuters, O’Leary’s remarks underscore a growing frustration within Ryanair’s leadership about the way Israeli authorities have handled the airline’s operations, particularly at Tel Aviv’s Ben Gurion Airport.
At the heart of the dispute is Ryanair’s objection to being charged higher rates for using the main terminal at Ben Gurion Airport. The airline prefers the newly reopened Terminal 1, which offers lower fees and is typically used by low-cost carriers. However, security concerns have led to the closure of Terminal 1, forcing Ryanair to use the more expensive main terminal. O’Leary was candid about the impact this has had on the airline’s bottom line, noting that Ryanair is being “messed around” by airport authorities who, in his view, are obstructing the company’s efforts to hold costs down.
This fee dispute is unfolding against a backdrop of significant instability in the region. Since the outbreak of the war in Gaza, Israel has faced not only the direct consequences of conflict but also escalating attacks and threats from Yemen’s Houthi movement. The Houthis have claimed responsibility for strikes on Israeli airports and infrastructure, actions they say are in solidarity with Palestinians. These attacks have led to repeated airspace closures, widespread flight disruptions, and a sharp decline in international travel to and from Israel.
Ryanair, like many other international carriers, suspended its flights to Israel earlier this summer, citing safety concerns. The airline previously announced it would not resume service until at least October 25, 2025. This decision is not unique—Britain’s EasyJet has suspended flights to Israel until spring 2026, and Israeli authorities are currently negotiating with Hungarian low-cost airline Wizz Air about opening a hub in the country next year. The prospect of Ryanair leaving for good, however, sends a particularly strong signal about the challenges facing Israel’s aviation sector.
The impact of these disruptions extends far beyond the airline industry. According to reporting from multiple outlets, Israel’s tourism sector has taken a severe hit, with the flow of visitors drying up amid ongoing violence and uncertainty. Investor confidence has also eroded, with regional instability fueling capital flight, currency volatility, and a slowdown in foreign direct investment. Shipping routes to Israel’s Red Sea ports have become riskier and more expensive, as insurers raise premiums in response to the heightened threat environment. These factors are compounding Israel’s wartime expenditures, contributing to widening budget deficits and slowing overall economic growth.
O’Leary’s comments reflect a broader sense of exasperation among international businesses operating in Israel. “Unless the Israelis kind of get their act together and stop messing us around, frankly, we have far more growth elsewhere in Europe,” he reiterated. The message is clear: unless Israeli authorities address the concerns of major international players like Ryanair, the country risks further isolation from global markets.
The timing of Ryanair’s potential exit is particularly consequential. The airline’s threat to leave comes just as Israeli officials are warning of their readiness to launch attacks anywhere in the region if deemed necessary—a stance that, according to BBC and Reuters, risks further destabilizing an already volatile region. On September 10, 2025, Israeli leaders issued these warnings after striking targets in Qatar, emphasizing their willingness to respond forcefully to perceived threats.
Meanwhile, Ryanair is not standing still. O’Leary announced that the airline would resume flights to Jordan in September or October 2025, signaling a strategic pivot toward markets perceived as more stable and profitable. “We have far more growth elsewhere in Europe,” he said, underscoring the company’s intention to focus its resources where they can yield the greatest returns.
The dispute over airport fees is more than a simple business disagreement—it is emblematic of the broader challenges facing Israel as it navigates the economic fallout of prolonged conflict. The closure of Terminal 1 at Ben Gurion Airport, justified on security grounds, has forced low-cost carriers like Ryanair to use facilities designed for full-service airlines, eroding the cost advantages that are central to their business models. O’Leary’s insistence that Ryanair will not return until these issues are resolved is a stark reminder that international carriers have options—and that they will not hesitate to exercise them if conditions become untenable.
Adding to the complexity, Israel’s negotiations with Wizz Air to open a hub in the country next year could reshape the competitive landscape for budget travel in the region. However, the suspension of flights by EasyJet and the uncertainty surrounding Ryanair’s future in Israel highlight just how fragile the situation has become. If Ryanair follows through on its threat to exit, it would mark a significant blow to Israel’s connectivity with Europe and could deter other carriers from investing in the market.
For travelers, the stakes are high. The loss of Ryanair would mean fewer options and potentially higher prices for flights between Israel and Europe. For the Israeli economy, the consequences could be even more severe, as reduced competition and connectivity threaten to undermine efforts to attract tourists and foreign investment at a critical juncture.
As the situation unfolds, all eyes will be on Israeli authorities to see whether they can address the concerns raised by Ryanair and other international carriers. The outcome will not only determine the future of low-cost air travel between Israel and Europe but also serve as a barometer of Israel’s broader economic resilience in the face of ongoing conflict and uncertainty.
With Ryanair’s ultimatum hanging in the air, the message for Israel is unmistakable: adapt and engage with the needs of international partners, or risk being left behind in a rapidly changing global landscape.
