Competition Authority Moves to Fine El Al NIS 121 Million for Price Gouging During Gaza War

Three days after the outbreak of the war in Gaza, Israel’s Competition Authority approached El Al with a cautionary message: avoid exploiting consumers during a national emergency. Three months later, the regulator concluded that the warning had gone unheeded.

On Sunday, the Competition Authority announced its intention to determine that El Al charged excessive prices on flights during the war and to impose a fine of NIS 121 million, the maximum allowed under the law, subject to a hearing. According to the authority, El Al abused its monopolistic power, which emerged after most foreign airlines suspended operations at Ben Gurion Airport.

Investigation confirms consumer complaints

The decision follows a two-year investigation in which the authority analyzed data from millions of tickets sold during the war and compared them to pre-war prices. The findings, officials say, confirm what many Israelis experienced firsthand within days of the war’s outbreak: sharply rising fares amid a collapse in competition.

In more direct terms, the authority accuses El Al and its controlling shareholder, Kenny Rosenberg, of generating extraordinary profits at the expense of consumers who had few alternatives as international carriers exited the Israeli market.

Monopoly on most routes during  the war

According to the regulator, El Al held a monopolistic position on 38 of the 53 routes it operated during the seven-month period examined. This dominance, the authority said, allowed the airline to raise prices significantly without fear of competitive pressure.

The Competition Authority announced it intends to impose the statutory maximum fine of NIS 121 million, pending a hearing.

Critics say the penalty bears no relation to profits

Despite the unprecedented move, critics argue the fine is insufficient. They note that the law caps financial penalties at a fixed amount, regardless of the profits generated from the alleged misconduct.

El Al’s own financial disclosures illustrate the scale of its dominance. In the third quarter of 2024, the airline’s market share on North American routes surged to 86.4%, up from 35.1% a year earlier. On routes to the Far East, market share climbed to 70.6%, compared to 46% before the war.

The trend continued into the first quarter of 2025, with El Al controlling 91.8% of North American routes and 80.1% of Far East routes—nearly double its pre-war share.

Profits soar as competition remains limited

The Competition Authority examined only seven months of pricing data, but El Al’s market dominance persisted well beyond that period. Many Israeli consumers continued to choose El Al despite high prices, citing concerns over cancellations by foreign carriers.

Between October 2023 and September 2025, El Al reported net profits of approximately $934 million. Against that backdrop, a NIS 121 million fine—about $39 million—appears marginal, even if imposed in full.

Wider impact on the Israeli aviation market

Regulators and analysts warn that El Al’s behavior set the tone for the broader aviation market. As the dominant player, its pricing strategy influenced Israir and Arkia, Israel’s other carriers, which also raised fares amid the lack of competition.

The result, critics argue, was a market-wide surge in prices that placed a heavy burden on Israeli consumers during wartime.

Calls to change the law and strengthen deterrence

Legal experts suggest the case exposes structural weaknesses in Israel’s competition enforcement framework. Some have called on lawmakers to amend the law to allow fines linked to profits earned from violations, similar to mechanisms used in the pharmaceutical sector, where damages can reach multiple times the illicit gains.

Without such changes, critics argue, fines risk becoming a cost of doing business rather than a deterrent.

Ruling could boost class action lawsuits

Beyond the fine, the Competition Authority’s determination that El Al abused its monopolistic position may have broader legal consequences. It is expected to strengthen a class action lawsuit filed against the airline in June, which alleges price gouging and estimates damages of $598 million.

Additional lawsuits may follow, though such cases often take years to resolve and frequently end in settlements.

For now, the regulator’s move marks a rare and significant step—but one that raises questions about whether Israel’s enforcement tools are sufficient to protect consumers during times of national crisis.