Israeli airline forced to push prices down after accusations of profiteering from regional conflict

Israel's national carrier was pressed into reducing prices to four destinations following a backlash over alleged "price gouging" after it published financial results showing it was making record profits amid the Gaza war.

El Al announced on Wednesday that ticket prices would be fixed for flights to Larnaca, Athens, Vienna and Dubai until December, following a meeting between the company CEO and economics minister Nir Barakat, Israeli media reported.

"Because many foreign airlines have cancelled flights, the objective is to enable Israelis to leave the country and arrive at international airports from where they can depart to any destination in the world at affordable prices per person," the airline said in a statement carried by newspaper Haaretz.

The Gaza war and tensions with Iran and Hezbollah prompted many foreign airlines to cancel flights to and from Israel, leaving El Al with limited competition.

El Al revenues have soared since, and last week the company announced it earned $147 million in the second quarter of 2024, up 150 percent compared to the same period last year and the most profitable in the company’s history.

The airline’s financial boon also comes after several airlines cancelled flights to and from Beirut, with foreign embassies urging citizens to leave.

There have also been flights cancelled to Tehran, Amman and Erbil in recent weeks, with planes avoiding Iranian airspace.

Fears of a wider regional conflagration have soared following Israeli strikes in Beirut and Tehran last month which killed a senior Hezbollah commander and Hamas political leader Ismail Haniyeh just hours apart.

Iran's Supreme Leader Ayatollah Ali Khamenei has vowed to retaliate harshly, leaving the region on tenterhooks.

El Al has faced a public backlash, according to reports, for allegedly profiteering from the regional instability.

In the first and second quarters of this year, it increased its market share on North American flight routes, believed to be a result of Israelis choosing El Al over foreign airlines that may or may not pull out under the current unstable climate.

Delta Air Lines, American Airlines, and United Airlines all suspended flights to and from Tel Aviv Ben Gurion Airport after the outbreak of war in October.

The airline's revenue gains also derive from a new demand for flying cargo because of the instability in the Red Sea due to attacks by Yemen's Houthi group.

The Houthis have launched missiles into the international shipping lane, targeting Israeli, US and UK-linked vessels. The Iran-aligned group said it has targeted more than 80 vessels with missiles and drones since October.

Earlier this year, El Al said it was halting flights to Johannesburg, citing a drop in demand following South Africa’s genocide case against Israel at the International Court of Justice (ICJ).