Competition Authority has launched an investigation into El Al over accusations of price extortion

The Competition Authority has launched an investigation into El Al Airlines over accusations of price extortion and exploitation of its monopoly status during the recent conflict. Consumers and industry stakeholders have voiced concerns that El Al significantly raised prices as foreign airlines suspended operations in Israel at the onset of the war, effectively monopolizing popular routes and capitalizing on the lack of competition.

While El Al is not officially designated as a monopoly, it held approximately 80% market share during the early stages of the conflict, with over 60% still retained. The Competition Authority vowed to examine whether El Al abused its dominant position to inflate prices during the crisis.

Flight prices surged during this period due to limited supply and diminished competition. Even with the return of airlines like Delta and United to Israel, ticket prices remained exorbitant, especially for flights to the USA during Passover, reaching as high as $2,930 for a round trip on El Al.

El Al's profitability soared during this period, nearly quadrupling compared to the previous year's fourth quarter. Lior Koren, CEO of Explorer, a flight search engine, emphasized that ticket prices are heavily influenced by demand and competition on specific routes. He noted instances where prices skyrocketed, such as flights to Athens for Coldplay concerts, underscoring the impact of heightened demand on pricing dynamics.

El Al responded to the allegations, asserting its commitment to transparent pricing policies amidst the challenges posed by the conflict. The airline stated that it has maintained ongoing dialogue with the Competition Authority and expressed confidence that the investigation will vindicate its fair and appropriate conduct given the circumstances.

The investigation underscores concerns over fair pricing practices and the need to ensure consumer protection, particularly during times of crisis when vulnerabilities are heightened. The outcome of the probe will shed light on the extent of El Al's pricing practices and could lead to regulatory measures to prevent future abuses of market dominance.