El Al Airlines is hiking the prices of air cargo transport from Europe to Israel

El Al Airlines has found itself embroiled in a public relations crisis after hiking the prices of air cargo transport from Europe to Israel by a staggering 150%. This decision has sparked outrage among industrialists, who accuse the company of exploiting the current situation for financial gain.

Critics have compared El Al's actions to unethical marketing tactics deployed during emergencies, comparing them to price hikes and the cancellation of promotions by retail chains during times of crisis. As one industrialist expressed to "Calcalist," "This is no less bad than marketing chains that raise prices or cancel promotions while the people of Israel are in a state of emergency."

The sudden and substantial increase in El Al's air transportation prices has taken the cost per kilogram of cargo from approximately $2.5 to a staggering $6 overnight. Industrialists have condemned this move as a blatant exploitation of the country's dire circumstances and the ongoing war. El Al, once the national airline, is now privately owned by Kenny Rosenberg and remains strongly associated with Israel. During the COVID-19 pandemic, the airline received a capital infusion from the state treasury to ensure its survival.

One industrialist who had planned to utilize El Al's air transport services voiced their dismay, stating, "In healthy competition, there are rules of demand and supply, and it is customary to raise prices when demand exceeds supply. This was also the case with El Al, which has only one cargo plane, and the demand for its transport services has skyrocketed. But in times of war, you don't do anything like that. You don't take advantage of situations like this."

El Al reported revenues of approximately $630 million in the second quarter of the year, marking a 22% increase compared to the same period the previous year—a record high since the company's IPO on the Tel Aviv Stock Exchange two decades ago.

Initially, El Al defended its actions by stating that it was prioritizing customers with pre-existing air transport agreements that offered significantly lower prices compared to last-minute cargo bookings. However, following inquiries from "Calcalist" and industrialists, the airline decided to reduce its prices and establish a uniform pricing structure for all, irrespective of previous agreements.

In response to the public outcry following the news report, El Al released a statement saying, "The two cargo planes that the company operates fly cargo according to long-term agreements with forwarders. With the outbreak of the war, when foreign airlines stopped flying to Israel, forwarders who are not the company's customers asked to fly cargo and accordingly received a list price for casual customers. In light of the growing security need, the prices were adjusted for all shippers."

El Al's decision to raise air cargo transport prices during a time of conflict has ignited a fierce debate, shedding light on the delicate balance between profit-making and social responsibility in times of crisis.