Israel’s antitrust regulator has accused the country’s flagship airline of exploiting wartime conditions to overcharge passengers, announcing plans to impose a record financial penalty over “excessive and unfair” pricing during the early months of the Gaza war.

In a statement, the Israel Competition Authority said it had notified El Al that it intends to levy the maximum sanction allowed under law — NIS 121 million (about $39 million) — for abusing its market dominance.

The regulator said the fine is subject to a formal hearing, during which El Al is expected to challenge the findings. Any penalty ultimately collected would be transferred to state coffers.

The announcement follows a lengthy investigation into air travel conditions after the October 7, 2023, attack by Hamas, which triggered the war in Gaza and led many foreign airlines to suspend service to Israel.

According to the authority, from the outbreak of the war through the end of May 2024, El Al effectively held a monopoly on flights to and from Israel. With most international carriers grounded, the airline became the primary — and in many cases only — option for Israelis and foreign nationals seeking to travel in and out of the country.

During that period, investigators found, El Al charged fares that far exceeded reasonable market levels.

“The company exploited its monopolistic position and charged excessive and unfair prices,” the regulator said, concluding that the airline took advantage of limited competition at a time of national emergency.

The findings suggest that passengers — including reservists, displaced residents, families of hostages, and citizens attempting to return home — were forced to pay inflated prices during one of the country’s most volatile and traumatic periods.

Competition officials said the pricing practices went beyond normal supply-and-demand adjustments and amounted to an abuse of market power prohibited under Israeli law.

The case marks one of the most significant enforcement actions ever taken against a major Israeli corporation and signals a tougher stance by regulators on corporate conduct during crises.

El Al has not yet publicly responded in detail to the decision but is expected to contest the ruling during the hearing process. Under the law, the company may present arguments disputing both the monopoly designation and the regulator’s assessment of its pricing.

The investigation also raises broader questions about corporate responsibility during national emergencies, when consumers have few alternatives and limited bargaining power.

While El Al was credited by officials for maintaining vital air links during the war, regulators said that role did not exempt the company from competition rules or justify what they described as profiteering.

The case now moves to the hearing stage, where the final scope of the penalty will be determined. If upheld, the fine would stand as a major rebuke to Israel’s largest airline and a warning to other companies operating in crisis conditions that emergency circumstances do not excuse abusive pricing practices.

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