Israel’s flagship airline, El Al Israel Airlines, is facing a potential $35 million fine after regulators accused the carrier of abusing its dominant position during the country’s war with Hamas.

The Israel Competition Authority said it has notified El Al of its intent to impose a financial sanction of roughly 110 million shekels, alleging that the airline unlawfully blocked a smaller rival from accessing critical maintenance facilities.

According to regulators, beginning in August 2024 — at the height of the war, when many foreign carriers suspended service to Israel — El Al repeatedly refused to allow Arkia Israeli Airlines to rent its aircraft hangars, even when space was available.

For years, El Al and Arkia had operated under an agreement allowing Arkia to use El Al-owned hangars for maintenance and inspections. The competition authority said the carrier’s refusal marked a sharp break from that longstanding arrangement.

“El Al’s conduct could have harmed Arkia’s competitiveness,” the regulator said in a statement, warning that restricted access to maintenance facilities exposed the smaller airline to safety, economic, and reputational risks.

Officials added that limiting Arkia’s ability to service its aircraft could have led to cancellations and delays, ultimately hurting passengers and raising the risk of lawsuits.

“Beyond the direct harm to the flying public, this could expose Arkia to significant legal and reputational consequences,” the authority said.

The watchdog said that El Al will be granted a formal hearing before any final penalty is imposed.

El Al has rejected the allegations, insisting it complied with competition laws throughout the conflict.

“El Al always acts in accordance with competition law provisions,” the airline said. “During the war, the company assisted Israeli airlines far beyond what was required by law, out of a sense of solidarity and commitment to the traveling public.”

The carrier added that it “provided and continues to provide Arkia with various services, including the use of hangars, to the extent possible.”

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