Some El Al Israel Airlines Ltd. (TASE: ELAL) passengers whose flights have been cancelled over the past six months are reporting being offered coupons worth 125% of the cancelled flight that they had paid for.
One passenger told "Globes" that he had accepted the offer because it increased the value of the ticket that had been cancelled from $1,810 to $2,262 and could be used until the end of 2021 on flights until November 2022. If the coupons are not used by then, the passenger will still be entitled to a 100% refund of the original ticket.
The coupons can be used on all El Al products including Sub D'Or flights upgrades and extra baggage. The 125% coupons will not be available for group booking of more than 10, who will only be eligible for a 100% refund. Passengers receiving a full refund on their fare and are members of El Al's frequent flyers club will receive a 30-point bonus.
El Al owes passengers an estimated NIS 1 billion in tickets for flights cancelled because of the Covid-19 pandemic over the past six months. Under normal circumstances passengers are entitled to a full refund within 21 days of the cancelled flight but because of El Al's dire financial situation, the Knesset Economics Committee has kept extending the deadline for repayment.
However, now that El Al has raised $150 million on the Tel Aviv Stock Exchange, the Knesset Economics Committee is insisting that it will not extend the deadline beyond October 1. The attractive bonus contained in the125% coupons, are El Al's way of avoiding having to repay the entire NIS 1 billion in canceled tickets in one go.
For new controlling shareholder Eli Rozenberg, the ticket refund presents not only a financial hurdle to be surmounted but also a first opportunity to regain customer confidence as the airline resumes passenger flights at the beginning of next month.
Published by Globes, Israel business news - en.globes.co.il - on September 22, 2020
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