The airport in Eilat, Uvda, is meant to be replaced next year by a new international airport being built in Timna.
For the meantime, until the new airport is completed, the government has approved Yisrael Katz's plan to declare the Eilat airport as one that is free from any duties on flights. This is meant to encourage tourism to Israel and specifically to Eilat. The airport services internal Israeli flights, as well as flights from Europe and other areas.
This exemption from duties will eventually apply to the new airport in Timna when it opens.
As well, Israelis will be able to benefit from the area and purchase items in the duty free region in the ports there, similar to the way Israelis can buy duty free products in Ben Gurion Airport. This is meant to encourage Israelis to vacation in Eilat rather than travel abroad.source: Ynet
It is a great idea, and if it encourages more tourism and brings more money into Israel, that would be great.
Regarding duty free for Israelis, I am sure it wont cause more Israelis to vacation in Eilat over travel abroad. Israeli's who travel abroad for cheaper vacations in Eastern Europe won't spend more money to vacation in Eilat just because they can save a small amount of money on whiskey and cigarettes. I do expect Israelis to figure out a method of benefiting from the duty free status in the Eilat ports without actually bothering to spend too much time in Eilat. I should note, this does not apply to all Israelis. Plenty of Israelis do vacation in Eilat, and hopefully those numbers will also increase. I just do not think the duty free will be what causes Israelis who dont prefer Eilat to suddenly prefer it for their vacation spot.
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