Israeli airlines lobby for assistance amidst $155 million refund burden

In a recent meeting of the Knesset’s Economic Committee, the dire financial situation of Israeli airlines came to the forefront, with revelations that approximately $155 million has been refunded to customers due to canceled flights during the ongoing conflict. This information was disclosed by the committee on Monday, shedding light on the impact of the war and the need for a delay in the enforcement of the Tibi Law.

The Tibi Law, officially known as the Aviation Services Law, mandates compensation for flight cancellations. However, the current situation has prompted discussions about the necessity of amending the law, considering the exceptional circumstances of the ongoing conflict.

Committee chairman MK David Bitan urged the ministries of finance and transportation to devise a comprehensive assistance plan for the struggling aviation industry within the next two weeks. The committee meeting aimed to address the exclusion of the aviation sector from general compensation arrangements, sparking concerns about the financial viability of Israeli airlines.

During the discussion, El Al’s Vice President of Commerce and International Affairs, Shlomi Zafrani, highlighted the airline’s pivotal role in maintaining airport operations during the conflict. “If El Al had not existed, the airport would have almost closed down, we fly almost 80% of those passing through the airport,” he said.

Should the law be suspended in times of war?

Zafrani urged a reevaluation of the Aviation Services Law, particularly in times of war or pandemics like COVID-19, citing the lack of clear provisions in such cases. He asked for equal competition conditions with foreign companies and said that in the case where the state or its institutions fly employees or delegations, priority should be given to flying with Israeli companies.

Zafrani urged a reevaluation of the Aviation Services Law, particularly in times of war or pandemics like COVID-19, citing the lack of clear provisions in such cases. He asked for equal competition conditions with foreign companies and said that, in the case where the state or its institutions fly employees or delegations, priority should be given to flying with Israeli companies.

Israir CEO Uri Sirkis echoed the sentiment, stating that the law should account for extreme circumstances and crises. Israir, operating at only 30% capacity compared to normal, faced a refund bill of approximately $20 million for canceled flights. Arkia CFO Alon Solar shared similar concerns, noting that Arkia had laid off 200 employees and requested state participation in hiring essential workers.

Chairman Bitan expressed his opinion that airlines should not bear the burden of additional compensation for flight cancellations caused by the war. He called for updates on negotiations with the Finance Ministry and demanded their completion within two weeks. A ministry representative assured a commitment to finding a solution to help Israeli airlines weather the crisis.

“Without a doubt the law should be suspended during times of war,” said Mark Feldman, CEO of Ziontours Jerusalem. “The vast majority of foreign airlines have ceased their operations, leaving Arkia, Israir, and El Al who have never wavered from their commitment to the Israeli public. They should be applauded for continuing to fly, not punished. Suspending the law is both a moral and economic imperative.