Airfare costs have soared since the onset of the war between Israel and Hamas, and El Al Israel Airlines has come under fire for its role in the spike. On Tuesday, a class action complaint was submitted to the Lod District Court, accusing El Al of inflating ticket prices during the national emergency that erupted after the events of October 7, 2023.
The legal motion, filed by attorney Ilan Verednikov and represented by Tal Rotman and Adi Zitron of the Perl Cohen law firm, contends that El Al exploited its dominant market position to impose unfair price hikes on passengers. The damages sought in the case exceed NIS 2.5 million.
According to the complaint, El Al took advantage of the fact that many international airlines had suspended their services due to the war, which left the company in control of numerous routes. The airline, the suit alleges, capitalized on this situation by raising ticket prices, behavior described in the filing as both unethical and illegal, leveraging national trauma for financial gain.
El Al responded on Wednesday, stating that it had yet to formally receive the legal documents. The company said that its legal team would respond through the proper legal channels once the suit is officially in hand.
“It should be emphasized that the company complied and continues to comply with judicial instructions, including relating to flight prices,” El Al added.
The class action further alleges that El Al’s conduct led to an estimated NIS 600 million in consumer losses by the end of Q1 2023. The financial damage, the plaintiffs say, only grew as the war persisted.
An economic assessment presented by Prof. David Gilo, a former head of Israel’s Competition Authority, supports the plaintiffs’ position. Gilo found that in 20 of 24 routes examined, El Al held a commanding share of the market. He concluded that the price increases could not be justified by any increase in the airline’s operating expenses. On the contrary, he argued, El Al’s costs actually declined while profits surged.
The legal filing highlights El Al’s exceptional wartime financial results. The airline posted a net income of approximately $554 million in 2024, a significant jump from the $113 million it reported the previous year.
The plaintiffs attribute this dramatic rise in profits largely to fare increases. The class action details a consistent pattern of rising ticket prices throughout 2023 and 2024, stating that average fares grew in tandem with the passage of time. Overall, there was a 14.2% jump in prices during 2024, the suit claims.
In an interview with Globes in November, El Al CEO Dina Ben Tal Ganancia acknowledged the criticism but sought to offer context: “The criticism is understandable. We raised fares much less than everyone thinks (El Al says there has been a 16% rise in average revenue per passenger). But the alternatives, the entire world of low-cost, for example, does not currently exist at Ben-Gurion Airport. People willing to fly at odd hours, or receive less good service, cannot do so now.”
The legal action also mentions that El Al’s stock price rose significantly, benefiting both its executives and major shareholders. CEO Ben Tal Ganancia saw a 10.2% salary boost, and other senior officials received similar raises. In addition, El Al employees were awarded an unprecedented NIS 103 million in bonuses, according to the lawsuit.
Verednikov emphasized that the airline’s alleged profiteering not only harmed consumers financially but also weakened national unity during a period of profound hardship. He is urging the court to require El Al to compensate affected travelers and to send a message discouraging future abuse of monopolistic power, especially during national emergencies.
The lawsuit has already triggered public outrage, and regulatory bodies such as the Competition Authority and the Consumer Protection and Fair Trade Authority have launched inquiries into El Al’s pricing behavior. However, their ability to compel restitution for consumers is limited. Verednikov is pressing for judicial action that would mandate the return of the company’s alleged wartime windfall to the public.
{Matzav.com}