El Al faces $35 million fine for barring Arkia from accessing hangar services

El Al faces a NIS 110 million ($35 million) fine as the country’s competition watchdog alleges that Israel’s flagship carrier abused its monopolistic position by refusing to grant smaller local rival Arkia access to hangar services for aircraft maintenance during the recent war.

The Israel Competition Authority says it has notified El Al of its intention to impose a financial sanction on the Israeli carrier. The move follows an investigation, which found that starting in August 2024, at the height of the war with the Hamas terror group, when many foreign airlines halted their flight operations, the Israeli airline began to consistently refuse Arkia’s requests to rent the hangars to service its aircraft, regardless of whether they were available or not.

The competition watchdog notes that for years, an agreement between El Al and Arkia has been in place, allowing Arkia to rent hangars owned by El Al to maintain and service its aircraft.

“El Al’s conduct could have harmed Arkia’s competitiveness, exposing it to economic, safety, and reputational risks,” the Israel Competition Authority says. “Impairing Arkia’s ability to handle malfunctions and perform necessary inspections and service on its aircraft could lead to cancellations or significant delays in Arkia flights.”

“Beyond the direct harm to the flying public, this could expose Arkia to lawsuits and reputational risk, thereby harming its competitiveness,” the watchdog adds.

El Al will be given a hearing to present its position before a final decision on the imposition of the sanction is announced, the competition watchdog says.

“El Al always acts in accordance with competition law provisions,” El Al says in a statement. “Throughout the war, El Al acted to assist Israeli airlines far beyond what was required by law, out of a sense of solidarity and commitment to the traveling public in Israel.”

“El Al provided and continues to provide Arkia with various services, including the usage of hangars, to the extent that it is possible,” the airline says.