El Al owes passengers some $350MM in refunds for flights that were cancelled.
Israeli law requires airlines to provide cash refunds for cancelled flights within 21 days. Back in April, Israel extended that timeframe to 90 days, but still required cash refunds.
But with the government potentially on the hook for providing refunds, Arutz Sheva is reporting that Israel has temporarily nixed the requirement for airlines to offer refunds for cancelled flights and that airlines can provide vouchers instead of cash refunds.
Under the new law, airlines that cancelled flights between March 1-August 31, 2020 can now get away with offering a voucher instead of a refund. That timeframe can be extended until May 31, 2021.
DDF member Hocker sent me this link to the actual law and Arutz Sheva appears to be missing a key detail of the new law.
What Arutz Sheva didn’t report is that if you don’t use the voucher or only use part of it, you are still eligible for a cash refund for the unused balance. However you won’t be able to request that refund until 21 days before the voucher expires.
The voucher that can be offered must be transferable to other passengers.
That voucher validity must be at least one year, but I don’t see anything in the law stopping an airline from making the voucher validity 3, 5, 10 or even 20 years in order to avoid having to pay a cash refund anytime soon. That’s a giant loophole!
While this new law will be a windfall for airlines and the Israeli government, it ignores that many consumers are out of work and can’t afford to be effectively forced to bail out an airline with an interest free loan.
Under the new law, airlines will also be exempt from paying any penalties for delayed or cancelled flights during the same time period.
El Al previously promised to offer refunds when they reopen. Now they can delay refunds for years.
Of course Israeli law doesn’t preempt laws in other countries.
Passengers on flights to or from the US can file a DOT complaint against any airline that cancels a flight and doesn’t provide a timely cash refund. Filing a DOT complaint has been the primary method that has worked for getting a refund from El Al.
Air Canada has decided to use the Canada Transportation Board’s guidance to refuse refunds and tell the DOT to back off. The DOT has yet to rule on that case and it remains to be seen if El Al will also try that tactic to avoid US law.
The European Union also requires airlines to provide timely cash refunds for cancelled flights, though I haven’t heard of El Al refunding cancelled Europe flights.
Have you been able to receive a refund for your flight to or from Israel?
HT: LeeLee18, via DDF and hocker