Israeli Court: Airlines Must Reimburse Lodging, Food, and Transport

(ASHDOD, ISRAEL) An Israeli small-claims judge has ruled that airlines and travel sellers must pay stranded passengers’ real expenses after war-related flight cancellations, even when the war itself frees carriers from fixed cash penalties.

In a decision dated October 7, 2023, the Ashdod Small Claims Court said passengers were entitled to lodging, meals, ground transport and a reasonable alternative flight under Israel’s Aviation Services Law, a consumer-protection statute often compared to Europe’s passenger-rights rules. The ruling is being re-read in 2025 as travelers again report being stuck abroad during the June 13, 2025 Israel‑Iran clashes, when Israel’s airspace closed for 12 days and thousands scrambled for seats home.

The court’s finding and the judge’s rationale

Judge Yehuda Lieblein accepted most of the plaintiffs’ claim after three defendants—an airline, a tour organizer and a travel agency—argued that the outbreak of war was an “extraordinary circumstance” that blocks statutory compensation.

Lieblein agreed the law can excuse the fixed compensation amount in such moments, but he stressed the companies’ basic duty of care: help first, argue later. Quoting his written decision, he said:

“All of the defendants were obligated to ensure that the plaintiffs… received lodging, food and beverage services, transportation services and an alternative flight. This was not done, and ultimately the plaintiffs were forced to purchase flight tickets themselves.”

Those replacement tickets, he noted, were on flights “operated by Israir at the request of the State of Israel, in order to ‘rescue’ Israeli citizens…”

What happened to the plaintiffs

• The plaintiffs had booked travel close to the start of the war and expected to go home on their original itinerary.
• When their flight was canceled, they said, no one arranged hotels or offered workable replacement routing.
• They were left to pay out of pocket and chase refunds later.

Lieblein wrote that none of the parties were at fault for the security situation, but he found each had a legal role in making sure help was provided in real time. The court ordered a total of 5,445 shekels, split equally among the three defendants, to cover:

• the difference between the refund they received and the higher cost of the replacement tickets, and
• documented lodging, food and transport.

Legal significance: duty of assistance vs. fixed compensation

Although the case was small, lawyers say it set a clear marker:

• The exemption for war or other “extraordinary circumstances” applies to fixed, pre-set compensation, not to the practical assistance that keeps travelers safe and fed.
• Under Israel’s Aviation Services Law, the fixed payment for a canceled flight can range from NIS 1,250 to 3,000 (roughly £260 to £630), depending on flight length.

A compact table for clarity:

Lieblein’s ruling said those fixed sums may fall away during war-related flight cancellations, but the assistance package remains in force. For passengers, the difference matters: a stranded student, a business traveler with an expiring visa, or a family with small children all face the same urgent questions within hours — where will they sleep tonight, and how will they get home?

2025 context: renewed disputes and class action

The decision drew renewed attention after the June 13, 2025 clashes shut Israel’s skies for 12 days, leaving travelers in Europe, North America and Asia hunting for any route back.

• As complaints mounted, El Al was named among nine carriers facing a potential 825 million shekels ($249 million) class action in the Central District Court in Lod.
• The suit argues that, even if the emergency excused statutory penalties, passengers still should have received the required help under the Aviation Services Law.

For many would-be returnees, the dispute is more than money: missed work, missed school terms, and immigration deadlines can follow quickly when a ticket becomes useless and an embassy appointment is lost.

Government, airlines and legislative changes

Israeli and foreign airlines have also pressed the government for relief. Through IATA’s Israel representative, carriers asked Transport Minister Miri Regev, Finance Minister Bezalel Smotrich and Economy Minister Nir Barkat to:

1. grant a retroactive “special situation” exemption starting June 13, and
2. commit state compensation if such relief is refused.

No such declaration has been made, according to the material cited in the dispute, meaning the full law still applies on paper.

A 2025 amendment to the Aviation Services Law moved in the same direction: it suspended statutory pay during emergencies but kept the duty to provide assistance. According to analysis by VisaVerge.com, the fight over these assistance benefits is likely to decide whether passengers see help at the airport desk or only after months of litigation.

What “assistance” means in practice

The Ashdod Small Claims Court ruling spells out what “assistance” should look like when a cancellation hits. Lieblein found airlines and sellers must ensure:

• access to lodging
• food and beverages
• transport between the airport and the hotel
• an alternative flight

This applies even if a war makes schedules chaotic. Claims can fail if a carrier offers a real substitute — for example:

• a departure within two hours and
• arrival within four hours of the original plan.

But the judge suggested a paper offer that cannot be booked or reached will not suffice. That point echoes European case law, including McDonagh v. Ryanair (2013), which held that carriers must provide care even when a volcanic ash cloud grounded flights.

Practical advice for travelers

For travelers (many crossing borders for work, study or family reasons) the practical lesson from the 2023 case is to keep records:

• Receipts for hotel rooms, meals, taxis, and replacement tickets can turn frustration into a viable claim.
• Some passengers may join broader proceedings like the Lod class action, but small claims remain an option for those with limited, documented losses.

Additional resources:

• Israel’s government portal has general guidance on consumer rights.
• Passengers can check official updates through the Israeli government’s Gov.il site when disruptions affect travel.

Lieblein’s award was not large, but it showed that courts will treat the duty of care as real money, not a slogan.

Broader consequences and closing points

The dispute sits at a tense intersection of consumer law and mobility. People trying to protect their status abroad can face hard deadlines: a visa may expire, a residency card renewal appointment may be missed, or an employer may refuse extra leave.

In the Ashdod case, the passengers ultimately bought their own seats on Israir’s rescue flights — a detail that underlined how quickly costs can climb when governments and airlines scramble at the same time.

Airlines argue they cannot conjure hotel inventory or aircraft capacity when a war starts, and Lieblein accepted that “all parties were blameless,” but he still required reimbursement because the law sets the obligation. For passengers weighing a claim, the message is plain:

• In Israel, war can erase penalty pay, but it does not erase care.

Legal advisers summarize the small-claims approach as:

1. show the cancellation,
2. show what the airline offered, and
3. show what you had to buy when no workable option appeared.

In small claims, plaintiffs often sue the airline and any agent that sold the package, because the Aviation Services Law can place duties on each seller in the chain. Lieblein divided the 5,445-shekel award equally — a reminder that courts may spread liability rather than pin it on a single party.

Passengers in 2025 disputes are also watching whether ministers approve the retroactive exemption request; without it, airlines may have to refund assistance costs even if they win on fixed compensation. For immigrants and foreign residents, that help can mean the difference between staying lawful and overstaying after a border closes. Even Israeli citizens abroad can face lost consular appointments and missed return dates as courts sort out the latest filings.