20 international airlines demand legal reforms, passenger compensation as condition to resume Israel flights

In a letter to Israel's Minister of Transportation on Monday, 20 international airline companies demanded that the State of Israel offer passenger compensation for canceled flights as a condition for resumption of flights to and from Israel.

In a joint letter to Transportation Minister Miri Regev, the signatories called for legal reforms, arguing that existing aviation laws were not designed to address prolonged uncertainty like the ongoing war with Iran and its terrorist proxies.

Earlier this month, most airlines canceled their flights to and from Israel after a missile fired from Yemen by the Iranian-backed Houthi terror group landed close to the Ben Gurion International Airport. It was the first time that a Houthi missile succeeded in evading Israel’s advanced and multilayered aerial defense system. While the damage was minimal, there are growing concerns that another missile could potentially hit the airport’s main terminal and cause multiple fatalities and injuries.  

Shirly Kazir, the head of Maritime and Hotels & Tourism practices at Fischer & Co law firm is representing the 20 foreign airlines. She urged the Israeli government to amend its laws to allow more flexible passenger compensation during the ongoing emergency.

“In light of the current state of emergency and the disastrous consequences of security incidents on the aviation and tourism industry… it appears that the conditions are ripe to issue an order to instate mechanisms applicable for emergency situations, which will allow flexibility in [passenger compensation] regulation, and incentivize foreign airlines to… resume their operations to Israel,” Kazir said during an interview with the Times of Israel.

The legal expert argued that the current legal situation in Israel “encourages airlines that are forced to cancel their flights due to a security incident to suspend their activity for extended periods, instead of stopping them only sporadically.”

Amid ongoing volatility in Israel’s flight market, international airlines are calling to reduce the required advance notice for canceled flights from 14 days to 3.

Under current law, the ongoing security uncertainty means passengers are not automatically entitled to compensation.

However, Israeli Aviation and Tourism attorney Ehud Fai recently argued that passengers are eligible for a refund or a rescheduled flight if their original flight is canceled as a result of security considerations.

“Even in such cases, the airline is still obligated to offer passengers either a replacement ticket or a full refund, based on the passenger’s choice, as well as assistance services such as hotel accommodation and meals until the alternate flight departs,” Fai said.

The Israeli Ministry of Transportation has so far declined to comment on the issue.

In addition to the temporary legal amendments, the 20 airlines also urged the Israeli government to provide them with similar assistance for maintaining flights that Israeli airlines receive.

Frequent flight cancellations by foreign airlines over the past 19 months of war have led to a shortage of available routes and soaring ticket prices, benefiting Israel's flag carrier, El Al Airlines, and other national airline companies.

In June 2024, El Al announced that it secured a record $80.5 million profit during the first quarter of 2024, attributing the surge to reduced competition from foreign airlines.

"Due to the fact that the war brought about significant changes in the movement of passengers in Israel and in the offer of flights in the market, the demand for the company's flights in the first quarter of 2024, despite the gradual return of foreign airlines, continued even stronger and even increased,” El Al stated.