Israeli Government Approves Tens of Millions in Compensation for Airlines Over War-Related Costs

The Israeli government has approved a compensation mechanism to support Israeli airlines for the financial burdens caused by empty flights during Operation "Roaring Lion." This decision follows a proposal by Transportation and Road Safety Minister Miri Regev and Finance Minister Bezalel Smotrich. During the operation, Israeli airports operated under significant safety, security, and operational restrictions, including passenger limits, aircraft parking shortages, and prolonged ground times, partly due to American refueling planes occupying parking spaces. These constraints forced airlines to conduct empty flights abroad to reposition or park aircraft, incurring costs that ticket sales could not cover.

The government will allocate up to 55 million shekels in 2026 to assist airlines. The compensation plan, to be developed by the Ministry of Transportation and the Civil Aviation Authority with the Finance Ministry's approval, offers two tiers of reimbursement. In the first tier, airlines can receive a 33.5% refund of recognized expenses, contingent on a commitment not to distribute profits to shareholders for one year. The second tier allows an additional 33.5% reimbursement if shareholders inject equity matching the state's contribution. Overall, aid can cover up to two-thirds of eligible costs.

Minister Regev emphasized the strategic importance of Israeli airlines, stating they are vital for maintaining the country's air and transport continuity during emergencies. She highlighted the government's commitment to help airlines bear the extraordinary costs imposed on them while balancing support with responsible public fund management to strengthen the sector's resilience. Finance Minister Smotrich described the aid framework as balanced and responsible, combining necessary government support with shareholder accountability, reflecting prudent economic management during emergencies and safeguarding Israel's security and independence.