As El Al cancelations continue, what can travelers do?

The wave of cancellations of El Al flights continued yesterday. Hundreds of passengers with tickets to Vienna, Lisbon, Milan, and Kyiv, among other destinations, were informed that their flights were cancelled and had to change their plans at the last minute.

Flight cancellations have become a fixture at many airports around the world. In London and Amsterdam and in Germany, the main reasons are a huge shortage of staff and the sudden rise in passenger numbers that caught the aviation industry unprepared, as it encountered difficulty in rehiring workers who were laid off during the Covid-19 pandemic.

Here in Israel, the reason for the cancellations is different: a dispute that has been going on for weeks between El Al’s management and its pilots.

At the height of the Covid-19 pandemic, when El Al was required to streamline in order to survive and receive state aid, the company parted from about one third of its employees in all sectors. In the pilots sector, 100 employees left, which was less than one third, and to make up for that the streamlining was in the form of a pay cut.

The basic pay of the pilots as set out in a collective agreement signed in 2018 was cut by 31%, and their per diem allowance was cut by 39%. The cut was embodied in a new collective agreement. El Al’s pilots refused to accept these sections of the agreement, but the Histadrut (General Fderation of Labor in Israel) under which they are unionized together with the rest of El Al’s employees, signed the agreement with the management. The agreement is valid until 2026, at the end of which period the pilots’ pay will rise 5%, but will not be restored to its pre-pandemic level.

The pilots seek to reopen the agreement in the light of the rapid recovery of the industry, and to cancel the cut in their pay. Their request also stems from the spirit of optimism with which El Al presented its first quarter financials. But in a court petition filed by El Al last week, the airline presents itself as being in a fight for survival, while its financials continue to bear a going concern qualification from its auditors. Among other things, El Al points out that it has accumulated debt of $1 billion.

It seems that the real dispute is one of principle. The pilots’ workers committee seeks to secede from the general representation of El Al’s employees by the Histadrut. Like their colleagues in most airlines (including Israeli airlines Israir and Arkia) they want separate representation of their interests. The Histadrut is adamantly opposed to such a move. El Al’s management, headed by CEO Dina Ben Tal Ganancia, has held several meetings with the pilots’ representatives, but has not succeeded in bridging the gap, and the rift has deepened to the point of the serious accusation against the pilots that they had caused a “mass casualty incident” occasioning enormous damage to the company and its employees.

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The accusation was made in a petition filed by El Al last week for an injunction against the pilots. In the petition, which has reached “Globes”, the management paints a problematic picture in which the proportion of pilots reporting sick and unable to fly shot up to 13% in May this year, compared with 3% in May 2019.

In May 2022, El Al claims, in 419 instances the pilots failed to confirm assignment to a flight and reported that they were sick. El Al’s method of manning flights, which it has maintained for years, opens the way to trouble. The airline does not schedule crews for all its flights, but leaves 20-30% of them unmanned, and crews them with pilots ad hoc.

In this way, the pilots earn more for flying hours for flights for which they are on call, but El Al is run with such uncertainty that it is involved in a daily hunt for flight crews. This leads to the flight cancellations that passengers are currently enduring again and again. The court decided that it would not issue an injunction, and that the sides should engage in intensive negotiations for two weeks, reporting to the court on progress every three days.

Apart from the crewing problem, El Al has also had a breakdown in one of its Dreamliner aircraft, which has been taken out of service, causing further disruption to the flight schedule, to flights to the US, for example.

Why are thousands of El Al tickets for the summer in doubt?

El Al has four Boeing 777 wide-bodied aircraft that it wishes to bring into service this summer, but in order to recommission the veteran aircraft it has to retrain pilots for them. The training has not taken place, however, and it is doubtful whether it can. Despite this, El Al told the court that it had sold more than 30,000 tickets for flights that it has incorporated into its schedule using these aircraft, and claimed that the pilots were disrupting the restoration of the fleet to operation by refusing to participate in the required training.

If that is how things stand, it is unlikely that these aircraft will fly in the summer, and it seems that El Al rushed to sell tickets that will probably be unusable.

What will happen this summer?

The expectation of the court, the management, the pilots, and of course the passengers, is that the parties will shortly resolve their differences. Summer is very near, and, added to the chaos at the airports, the dispute is likely to lead to more flight cancellations.

If El Al behaved like other airlines, which announce flight cancellations in advance, passengers would be furious, but would also be able to find alternative solutions. It seems, though, that the situation is being managed as usual, and passengers have to hope that their flight will not come out in the lottery and that they will not be informed of its cancellation at the last minute.

What rights do Israeli travelers have if their flight is cancelled?

Under Israeli aviation law, in the event that a flight is cancelled, the airline has to repay passengers their fares. In the notifications that El Al customers are receiving, the airline offers them a refund or a credit for use in the future. Customers can accept the credit, but the choice is theirs.

The law also stipulates that the airline must compensate customers in accordance with the flight distance. For a flight of up to 2,000 kilometers, it must pay NIS 1,320, in addition to refunding the fare. For flights of up to 4,500 kilometers, the compensation is NIS 2,120, and for flights longer than this, it is NIS 3,180. The airline must also pay for an overnight stay if no alternative flight is found.

Are customers entitled to refunds for expenses incurred in cancelling hotel bookings, tickets for shows, and for disruption of plans?

Customers can file a claim against the airline and demand, in addition to the fare refund and statutory compensation, payment for particular damage caused to them. Israel’s Supreme Court recently ruled that Iberia should pay Israeli passengers whose suitcases were not loaded onto their flight, and who received them only at the end of their vacation, NIS 5,000 for distress.

If we are fearful of disruption and decide to cancel in advance a flight booked with El Al, are we entitled to a refund?

Under the Consumer Protection Law, a flight booked remotely (online or by telephone) can be canceled for up to fourteen days, as long as seven days remain until the date of the flight. This only applies to airlines that have representation in Israel, as the Supreme Court recently ruled in dismissing a claim against easyJet.

If fourteen days have passed since the booking was made, whether or not customers are entitled to refunds when they cancel tickets depends on the type of ticket purchased. Cancelable tickets cost more. El Al offers three price levels. At the basic level, no refund is payable if the customer cancels. At the two other levels, Classic and Flex, a refund can be obtained, less a handling fee.

Travelers who buy insurance against cancelation of a trip for any reason can exercise the policy and obtain a partial refund of expenses they have incurred. Given the current uncertainty, buying flexible tickets that can be changed or canceled is advisable.

El Al stated in response: “We regret the inconvenience caused to our passengers because of unforeseen disruptions to flight operations. El Al staff do all they can to find alternative solutions, whether through another El Al flight or through flights of other airlines.”

Published by Globes, Israel business news – en.globes.co.il – on June 20, 2022.

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