As the Israel-Gaza war shows signs of winding down, another front of the conflict has intensified far beyond the region’s borders: a wave of global boycotts targeting companies linked to Israel. From fast-food chains and tech giants to consumer brands and airlines, activists have urged consumers to cut ties with firms seen as complicit in the war or operating in areas they deem as “occupied territories.”
The campaigns are part of a broader revival – and rise in popularity – of the Boycott, Divestment and Sanctions (BDS) movement, launched in 2005 to pressure Israel over its treatment of Palestinians.
Over the past two years, particularly on social media, the calls to “boycott” have gone viral – spreading faster than any other organized campaign in years.
However, behind the visibility lies a more complex reality. Economists and trade analysts say the boycotts’ economic bite has been modest, especially compared to the far greater disruptions caused by the war itself.
The real impact, they say, lies not in lost revenue but in the battle over public perception – a struggle now shaping how corporations, investors, and consumers navigate one of the world’s most politically charged markets.
Risk over politics
Since Hamas’s attack on October 7, 2023, international air travel to Tel Aviv has been sharply curtailed. Flights were grounded almost overnight, and even two years later service remains far below prewar levels.
Despite speculation that airlines are abandoning Israel for political reasons, analysts say the reality is much more practical: security concerns and operational challenges.
Major carriers – such as United Airlines, Delta, American Airlines, Air France–KLM, Lufthansa, and British Airways – stopped their flights to Israel, citing missile activity, insurance risks, and airspace closures.
Even Israel’s national carrier, El Al, faced some turbulence, filling the gaps left by foreign airlines – a shift that created a near-monopoly and sent ticket prices soaring.
John Grant, chief analyst at OAG Aviation, told Reuters that airlines are motivated by risk rather than politics. He said airlines are risk-averse by design, and when safety, insurance, and regulatory conditions stabilize, they return to affected routes.
Even Ryanair, Europe’s largest low-cost airline, resumed service in early 2024, only to suspend flights when its low-cost terminal at Ben-Gurion Airport closed. CEO Michael O’Leary cited “commercial viability and safety,” not political pressure, as the reason for pulling out.
For travelers, the consequences have been clear: fewer foreign carriers, higher fares, longer routes, and ongoing uncertainty. Analysts expect most carriers to return once risks stabilize – further evidence that practical considerations, not politics, drive airline behavior.
BDS fallout
Other sectors have also been targeted by BDS campaigns. Israel’s pharmaceutical giant Teva has been accused by activists of profiting from Israeli government policies. Calls to boycott its products have circulated worldwide.
Yet, here too, the company – and the sector – have experienced very little fallout from boycott campaigns, with analysts pointing out that Teva’s global operations insulate it from serious financial damage.
Instead, it is fallout from the war itself – shipping disruptions and rerouted trade – that has posed a much greater challenge than symbolic boycotts.
Similarly, global brands such as McDonald’s, Burger King, Pizza Hut, and Domino’s have been targeted due to their presence in Israel and reports of local franchisees offering free meals to soldiers or expressing support for the country.
Starbucks faced its own turbulence when its global workers’ union issued pro-Palestinian messages on social media, though the broader corporate impact was limited.
Consumer goods, tech, and defense sectors have also faced boycott calls, yet Israel’s exports – especially in hi-tech and defense – remain resilient.
Large companies such as Intel, Hewlett-Packard, and Microsoft continue operations despite public criticism, and multibillion-dollar investments, such as Intel’s new chip plant, underscore confidence in the sector.
Underlying risks
Prof. Dan Ben-David, president and founder of the Shoresh Institution for Socioeconomic Research, and professor of economics at Tel Aviv University, said that Israel’s long-term risks are subtler but potentially more significant than consumer boycotts.
He noted that Israel is one of the most resilient economies in the developed world, rebounding quickly from both COVID-19 and the global recession. Nearly all of Israel’s major economic activity is concentrated in hi-tech, which accounts for only 6% of the workforce but produces half of the country’s exports.
Ben-David warned that international perceptions and structural vulnerabilities pose bigger threats than consumer boycotts alone. “While BDS has been around for many years, Israel has given it excuses to expand its reach,” he said, adding that a wider boycott in Europe – Israel’s largest trade partner – could have serious effects if countries decide to restrict engagement.
Signs of this are already appearing in academia, where exclusion from conferences, limited publishing opportunities, and promotion hurdles could discourage scientists from pursuing careers in Israel, thereby creating long-term intellectual and economic consequences.
Additionally, some European pension funds and investment institutions have reviewed holdings in Israel-linked companies. While divestment has been modest so far, the trend signals reputational risks that could grow if domestic policies fail to address concerns.
Symbolic power
The symbolic power of BDS campaigns is undeniable. Social media amplifies their reach, and activists’ campaigns against Israeli companies like SodaStream, Ahava Dead Sea cosmetics, and Israeli-grown dates continue to attract attention, particularly in Europe.
Labels distinguishing “Made in Israel” from “Made in an Israeli settlement” remain a flashpoint for ethical consumers, too.
However, for most sectors, the economic impact is limited. Foreign direct investment dropped by 30% in 2024, but analysts attribute the decline largely to wartime uncertainty and global market volatility rather than boycott campaigns. Airlines, tech companies, and multinational retailers have absorbed disruptions without lasting damage.
Ben-David said, however, that domestic reforms are now needed to mitigate any symbolic or tangible economic risks. He pointed to structural issues in education, budgeting, and demographics, noting that upcoming elections will determine whether Israel can address these challenges. Failure to do so, he warned, could exacerbate international criticism and economic pressure.
Still, the campaigns’ social and political effects endure. They influence narratives, shape public opinion, and signal reputational risks to investors and partners. In a polarized global economy, perception can be nearly as consequential as profit margins.
Ben-David concluded that without internal reforms, external risks could grow into serious challenges – but decisive domestic action could stabilize Israel both at home and abroad.
Though many boycotts may make more noise than impact, Israel must still adapt to avoid isolation and ensure that symbolic campaigns never become substantive ones.■