El Al demands changes to passenger compensation law

El Al Israel Airlines Ltd. (TASE:ELAL) has sent an urgent letter to Minister of Transport Miri Regev demanding that a temporary order be immediately invoked adapting the Aviation Services Law to the reality created by the current war. According to the airline, the current operating conditions at Ben Gurion Airport, which include a limit of 50 passengers on departing flights and a maximum of one aircraft per hour, do not allow for regular or economic operation of flights, and continuation of the situation could severely harm the company.

The letter focuses on a central demand: a temporary change to the Aviation Services Law, so that it fits the emergency conditions. El Al wants cancellation of passengers’ entitlement to assistance for flight cancellation. Such adjustment to the law would include cancellation of entitlement to financial compensation, adjustments to entitlement to accommodation, and adjustments to providing passengers with an alternative flight. These adjustments, El Al says, are required to allow airlines to operate under the existing restrictions, without incurring costs that are not in line with operational reality.

El Al also calls on the Ministry of Transport and the Knesset Economic Affairs Committee to immediately lead a dialogue with all relevant parties, with the aim of formulating solutions that will enable the continuation of Israeli aviation activity during the war.

Direct economic damage

Along with the demands, the letter presents a tough economic picture for the airline during the war. According to the company’s estimates, on days when there was no commercial flight activity at all, the direct damage was about $5 million per day. Even now, when flights are operated on a limited scale, revenue does not cover costs, among other things due to restrictions on the scope of activity and high expenses resulting from operating the aircraft under exceptional conditions.

The letter also notes that costs continue to rise due to external factors, including increased jet fuel prices and fluctuations in exchange rates, as well as the need to maintain a broad operational structure even when actual activity is limited. It also warns that even after the operation ends, the company will need an additional period of time to return to regular activity, which deepens the economic damage.

Since the beginning of the Iron Swords war in October 2023, which left El Al for many months in dominant control of Ben-Gurion Airport, and exclusive control of the profitable routes to North America in particular (including last year when its share was about 71% compared with 91% in 2024), El Al earned cumulative profits of $1billion dollars. Last year, El Al even resumed distributing dividends to shareholders for the first time since 2017. The company distributed a dividend of $106 million.

Published by Globes, Israel business news – en.globes.co.il – on March 31, 2026.

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