ISRAEL— The Israel Competition Authority has moved to impose a major financial penalty on El Al Israel Airlines (LY) following findings that the carrier charged excessive fares during the war. The proposed sanction, which could reach up to NIS 121 million, represents the maximum penalty allowed under Israeli competition law.
The investigation focuses on air travel to and from Tel Aviv Ben Gurion International Airport (TLV), where flight availability dropped sharply after many foreign airlines suspended services. During this period, El Al became the dominant operator on most international routes serving Israel.
EL AL Israel Fined by the Authority
The Israel Competition Authority said it informed El Al that it intends to fine the airline after concluding that fare increases during the war were excessive and unfair, Globes reported.
The decision remains subject to a formal hearing, during which the airline will be allowed to present its arguments before any final ruling.
According to the Authority, the market structure changed dramatically after October 7, 2023, when security concerns led many international carriers to halt operations. With reduced competition, the regulator found that El Al gained significant market power over a sustained period.
Data reviewed by the Authority showed that El Al’s share of passengers rose from around 20 percent before the war to more than 70 percent within days.
In the early months of the conflict, the airline carried over half of all passengers passing through Israel’s main international airport.
Monopoly Routes Operated by El AL
The investigation determined that El Al held a monopoly on at least 38 of the 53 routes it operated during the period under review. These routes included major global destinations such as London, New York, Paris, Bangkok, Tokyo, and Los Angeles.
The Authority said this level of dominance limited consumer choice at a time when air travel had become an essential service. Many passengers had no practical alternative carrier, particularly for long-haul travel, due to the prolonged suspension of foreign airline services.
While other Israeli airlines continued limited operations, El Al operated the largest network and the highest flight frequencies. This position, according to regulators, created conditions in which pricing decisions had an outsized impact on consumers.
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Fare Increase Data
To assess pricing behavior, the Authority analyzed millions of tickets sold by El Al between October 2023 and the end of May 2024. It compared these fares with prices from the same period a year earlier, using economic models to account for seasonality and standard demand shifts.
The analysis found that average fares increased by about 16 percent during the war. On certain routes, prices rose more sharply, ranging from 6 percent to as high as 31 percent.
Investigators also identified price increases on flights that were not fully booked. On these services, fares rose by roughly 25 percent, affecting about 16 percent of passengers during the period examined.
The Competition Commissioner said such increases were not justified under normal market conditions and reflected exploitation of emergency-driven market power. The Authority noted that the classification of “excessive pricing” is rare in Israel and has previously been applied only once, in the case of a life-saving medication.
El Al rejected the findings, stating that the reported fare increase figures are inaccurate and unprecedented as a basis for an excessive pricing claim. The airline said it will present its full position during the hearing and in any appropriate legal forum.
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