Israeli Supreme Court Rules Travel Agencies Cannot Charge Fees for Flight Refund Assistance

Israel's Supreme Court has ruled for the first time that travel agencies are prohibited from charging fees when assisting passengers in obtaining refunds for canceled flights. Justice Gila Kenaf-Steinitz stated that this ruling is particularly significant given the frequent flight cancellations, often for security reasons. The decision came in a case where Doron Ben-Shimon purchased a flight ticket for 1,087 shekels from Wizz Air through the travel agency Issta. After Wizz Air canceled the flight, Issta returned only 911 shekels to Ben-Shimon, retaining the difference as a handling fee. Ben-Shimon's claim for the refund of the difference was initially rejected by the Small Claims Court and the Tel Aviv District Court. However, Justice Kenaf-Steinitz agreed to hear the case in a rare third appeal and ruled in his favor.

Kenaf-Steinitz noted that lower courts had reached conflicting conclusions on the issue, with some ordering travel agencies to return deducted fees and others allowing the deductions. She emphasized that the Aviation Services Law mandates the refund of the full ticket price, including all taxes and fees, within 21 days of the passenger or travel agent's written request. The law also requires travel agencies to assist passengers in obtaining these refunds.

The justice reasoned that a temporary authorization allowing travel agencies to charge fees during the COVID-19 pandemic, which was a specific emergency measure, implies that such charges are generally forbidden. She argued that if charging fees were permissible by default, a special regulation would not have been necessary. The purpose of the Aviation Services Law is to protect consumers, and allowing agencies to deduct fees would undermine this objective. The court ordered Issta to repay Ben-Shimon the deducted handling fees, with interest and linkage, and to pay 5,000 shekels in legal expenses. Justices Yael Vilner and Daphna Barak-Erez concurred with the ruling, with Barak-Erez suggesting that travel agencies can factor the potential cost of refund assistance into their initial pricing.