Israeli Airlines Refund $155M for War-Canceled Flights

By Aryeh Stern

The Economic Affairs Committee, led by MK David Bitan (Likud), met Monday to discuss the situation of Israeli airlines amid the war. Bitan raised concerns over the exclusion of the aviation sector from general compensation arrangements, questioning whether the Ministries of Transportation and Finance were devising a special plan for these airlines.

During the meeting, it was revealed that Israeli airlines had refunded approximately $155 million due to flight cancellations, as mandated by the Aviation Services Law (known as the “Tibi law”).

El Al’s VP of Commercial and Industry Affairs, Shlomi Zafrany, highlighted the company’s efforts to respond to public needs during the crisis. He stressed El Al’s role in maintaining operations at Ben Gurion Airport, calling for amendments to the Aviation Services Law and equal competition conditions against foreign airlines.

Several MKs supported the need to aid Israeli airlines, with discussions revolving around preferential treatment for these airlines in state-funded flights.

CEOs from Israir and Arkia outlined their challenges and called for amendments to the law, citing a significant decrease in operations and the financial impact of flight cancellations.

Committee Chairman MK Bitan emphasized that airlines should not bear additional compensation costs resulting from the war, urging swift negotiations with the Ministry of Finance within two weeks.

A Ministry of Finance official expressed intent to assist Israeli airlines in overcoming cash flow crises but stressed opposition to measures that distort competition.

The Civil Aviation Authority proposed canceling additional compensation for flights canceled during the war period. Representatives from the International Air Transport Association stressed the need for long-term strategies to strengthen Israeli aviation.