El Al Israel Airlines Ltd. (TASE: ELAL) is expediting repayment of tickets for flights that were canceled because of the Covid-19 pandemic. The company has announced that it has already repaid 85% of its debt to customers for cancelled flights and that, "during June, El Al will complete the refund of money in Israel to passengers whose flights were canceled due to the coronavirus crisis."
The issue of refunding passengers has plagued El Al over the past year. Discussions by various Knesset committees on the matter have estimated the debt to passengers at more than NIS 1.1 billion. In its first quarter 2021 financial statement, the airline said that it had not been able to complete the refund required by law and that it had repaid 70% of the debt by the end of the first quarter. El Al did not state the scale of the debt but market sources estimate that it amounted to about $120 million.
El Al recently received $210 million from the state, as part of its assistance package, to cover the damage from the Covid-19 crisis, in exchange for 20 years worth of tickets for government-funded security staff. As part of the package, El Al is also committed to raise a further $105 million. After receiving the money from the state, El Al pledged to speed up payments of its debt to passengers and suppliers.
El Al has been subject to enormous criticism from passengers who have not yet received their refunds for cancelled flights, and have not even been able to receive any kind of personal voice response from an El Al representative. Some of those who have received the refund said that they were only able to achieve this after filing a lawsuit, with the money repaid before the suit came to court.
El Al CEO Avigal Soreq said, "The repayments are El Al's most important task. Customers are at the top of the pyramid and we will do everything to take care of their safety and their money. We are coping with a financial crisis resulting from the global coronavirus crisis. Many governments around the world understood this and have helped airlines with tens of billions of dollars. We only recently received money from the state and accordingly we are making the repayments in order to meet our commitments to our customers.
El Al stresses that they are currently bringing 300 service and finance representatives back to the airline from unpaid leave who will be specifically trained to move forward with the refunds. Those customers who chose a refund will receive an email detailing the date on which the refund will be paid. Customers who bought their tickets from a travel agent will be refunded by the travel agent.
"El Al said, "The process of repaying the money to customers is complex and has precise and individual requirements for each customer, and involves, among other things, direct checking with the customer, in order to implement the refund. Customers who have not yet chosen one of the various refund tracks will receive an additional email in which they will be asked to choose the track that they prefer."
El Al chief of CEO staff Shlomi Am-Shalom has promised that the process will be transparent and that the company, "Will update regarding progress and executing the refunds until the process is completed."
Published by Globes, Israel business news - en.globes.co.il - on May 27, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021