El Al is pushing for a get-out-of-jail-free card on passenger compensation as thousands of Israelis continue to remain stranded amid war with Iran.
According to preliminary motions filed by the airline obtained by Globes, El Al is seeking an amendment to the country’s Aviation Services Law that would remove its obligations to passengers during emergencies.
Since 2012, the Aviation Services Law has guaranteed basic rights for passengers when flights are cancelled or significantly delayed. Airlines must provide hotel accommodation, airport transfers, food and refreshments. Compensation can range from hundreds to thousands of shekels, plus refunds or alternative tickets. While airlines don’t have to pay statutory compensation during extraordinary circumstances like war or airspace closures, they’re still on the hook for assistance costs.
In December, the Knesset passed temporary amendments to the law. Accommodation is now limited to two nights instead of unlimited stays. Cancellation notices can be shortened from 14 to 3 days. Airlines can offer alternative flights to nearby destinations rather than the original one. But these changes only kick in if Transport Minister Miri Regev declares a “special situation,” something that El Al says it deserves, having helped repatriate tens of thousands of Israelis by air and sea since the conflict began.
“In the current reality, it cannot bear the burden of hundreds of flights, some of which are loss-making, without the state providing legal and financial backing that would allow the continuation of the operation,” El Al stated.
Meanwhile, El Al is facing public criticism for price gouging since Hamas attacked Israel on October 7, 2023. Within days of the attack, regular international airlines including budget carriers immediately suspended operations to Israel, creating unprecedented market concentration that handed El Al monopolistic control over 20 of 24 flight routes.
As a result, per passenger profit margins increased 15-fold compared to pre-war levels, with net profit margins reaching 28.5% during the first three quarters of 2024. In the end, El Al’s 2024 net profits exploded to $554 million compared to just $113 million in 2023.
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