Israel Airport Authority to Raise Passenger Fees by 11% in 2027

The Israel Airports Authority (IAA) announced an upcoming increase in passenger fees for departures from Ben Gurion Airport, set to take effect in 2027. The fee for passengers departing from Terminal 3 will rise to $37.68 from the current $33.87, while the fee for Terminal 1 will increase to $17.36 from $15.61 in 2026. This represents an approximate 11.2% rise in the dollar-denominated fee.

The fee is collected from airlines, which then pass it on to the IAA. While airlines are responsible for paying the fee, it is considered a component of flight operating costs and may be reflected in ticket prices for passengers. The extent to which this cost is passed on depends on individual airline pricing strategies and market competition.

The IAA clarified that the increase is not due to a decision to raise fees beyond the established mechanism. According to IAA regulations, fees are set in Israeli shekels and adjusted annually based on the consumer price index and the prevailing dollar exchange rate. The 2027 adjustment reflects a 1.54% increase in the index. This annual adjustment is automatic and occurs within the legal framework.

Notably, a significant factor contributing to the higher dollar amount is the recent decrease in the dollar's exchange rate. Since the fee is based on a shekel amount, a weaker dollar results in a higher dollar equivalent. The IAA emphasized that in shekel terms, the increase is solely due to the required indexation adjustment, with no additional hikes beyond the mechanism.

For airlines, this means increased costs per departing passenger, with the cumulative impact depending on their operational volume. Airlines handling hundreds of thousands of passengers annually from Terminal 3 could face millions of dollars in additional annual fees. Passengers might feel the impact most during periods when airlines struggle to absorb additional costs, though in a competitive market, airlines may absorb part of the increase.