El Al stops payout for flight delays from Europe

El Al   photo: Sivan Farag

Despite a German court ruling that it is subject to EU law, El Al claims only Israeli law, which is much less favorable to passengers, applies to it.

Within the past few weeks, El Al Israel Airlines Ltd. (TASE: ELAL) has toughened its policy on compensation for delayed flight, according to figures on the Claim it website, which handles claims for compensation against airlines arising from flight delays.

Under EU Regulation 261/2004, compensation is payable for any delay of more than three hours. This contrasts with Israeli law, which is much less favorable to passengers and provides for compensation only in the event of an 8-hour delay or more.

A flight delay is measured according to the actual landing time in comparison with the original scheduled time. The law exempts companies from liability to pay compensation for delays arising from causes beyond their control, such as extreme weather conditions, airport strikes, terrorist incidents, and so on.

EU law stipulates €250 compensation for flights up to 1,500 kilometers; €400 for flights of 1,500 to 3,500 kilometers; and €600 for flights over 3,500 kilometers.

El Al is obliged to pay passengers compensation under EU law for flights that take off from European airports and are delayed by three hours or more. Claim it CEO Ralph Pais says however that El Al responds to compensation claims that it is subject to Israeli law and therefore is liable to pay compensation only in the event of an 8-hour delay.

"Most flight delays are in the 2-6 hour range, so that if Israeli law is the factor, El Al is exempting itself from paying compensation amounting to hundreds of thousands of dollars that it is obliged to pay," Pais told "Globes".

In response letters to passenger demands that "Globes" has obtained, El Al's changed approach is clear. So, for example, is response to an approach by Claim it over a delay to a flight by El Al subsidiary Sun d'Or from Ljubljana to Tel Aviv in June 2017, the company stated that it would pay compensation as required by EU law by means of a bank transfer.

This week, in response to a claim concerning a flight that took off from Rome on April 8, the company's approach was somewhat different. It claimed that since the delay was less than eight hours, it was not liable to pay compensation, since it operated under Israeli law.

El Al even wrote to Claim it saying that henceforth it would not respond to its compensation claims, and that the passenger who had lodged a complaint was welcome to approach it directly concerning reimbursement for expenses incurred as a result of a flight delay.

The change that Pais identifies stems from a case against El Al a year and a half ago, in which a German court ruled that it was liable to pay compensation to Israeli passengers for delays to flights that took off from Europe. The lawsuit was filed after El Al said that it would pay compensation under EU law only to EU passengers, thus discriminating against the Israeli passengers. At that time too El Al argued that relations with Israeli passengers were governed by Israeli law.

"The court ruling led to a change at El Al, which started to abide by EU law. In the past two weeks, however, the company has made a 180 degree turn and has decided to claim that EU law does not apply to it. This time round, El Al is not just discriminating against Israeli passengers, but depriving foreign passengers, who it claims are not entitled to compensation."

Pais says that 2,000 Israelis have recently contacted it for assistance in obtaining the compensation due to them in claims against El Al and other airlines. Claim it takes 30% of the compensation received. "El Al prefers to drag us and the passengers to court, and several cases are pending."

Do other non-European airlines conform to EU law?

"We are in contact with more than 100 airlines. It can't be said that they love us, but relations with them are good. With El Al, communication is impossible, and it's ridiculous to start the dispute all over again now.

"In the US, for example, there is no law that stipulates compensation for a delay, and it’s a matter of the airline's policy. Even Delta or American Airlines understand that when they take off from Europe, European law applies to them, as do airlines from the Gulf such as Emirates, which understand the law very well. The airlines know that they cannot evade passengers' rights, and I stress, this is not a gift but a right in accordance with the EU directive. El Al's behavior is not fair."

Is it different with the other Israeli airlines, Israir and Arkia?

"In general, the situation with them is better. The difference is that El Al has offices in Europe, and Israir and Arkia do not, so that if they argue that EU law does not apply to them, that's an understandable claim. But El Al has representation here, because it seeks European passengers, and it is therefore well aware of the laws that bind it."

"Evasion of compensation is unjustified"

Pais says that 75% of compensation claims against airlines for flight delays are rejected, at least initially. "Sometimes this is justified, and the airline had no choice, such as in cases of extreme weather or a strike. But in most cases the evasion is unjustified, and the passenger doesn't know that. He or she accepts the excuse that the airline gives and doesn't continue to prosecute the claim."

He cites a claim being conducted against El Al following a flight that took off from Brussels for Tel Aviv on December 29, 2016 and that landed in Prague on the way in order to switch pilots. "The passengers accepted this explanation, but it is not a justifiable reason. All El Al's recent refusals will reach the courts in Europe. When El Al responds to a passenger that it is subject to Israeli law, that may sound logical, and I would assume that 90% of passengers will not insist on receiving compensation. What they don’t know is that the airline is saving a great deal of money at their expense and is certainly not playing fair. We know that it's ridiculous, and that not a single court will accept this argument."

According to the Flightstats website, in April this year El Al had the fourth worst punctuality record among 42 global airlines, with 33.56% of its flights being delayed. Flightstats defines a delayed flight as one that arrives fifteen minutes or more later than scheduled.

El Al declined to comment on the report.

Published by Globes [online], Israel business news - www.globes-online.com - on May 8, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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El Al   photo: Sivan Farag
El Al photo: Sivan Farag
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