This article published in the Jerusalem Post takes a hard look at the latest news on failing airlines. It is painfully clear that failing airlines don’t care about passenger woes caused by sudden disruptions in service. Apparently consumers are out of luck when it comes to refunded airfares or re-booking flights.

Failing Airlines Don’t Care About Passenger Woes

Last week, three airlines’ actions and a very angry CEO created confusion and challenges for all involved in the airline industry.

It was on a cold and blustery Friday night that Spanair, the Barcelona-based airline, grounded all its airplanes. Citing the country’s economic crisis, its owner said it would not sink any more money into the company. Earlier in the day, a potential rescue plan for Spanair fell apart when Qatar Airways pulled out of talks to buy a stake in the airline.

One of their busiest routes was between Tel Aviv and Barcelona, and thousands of passengers were left stranded. Part of the largest airline alliance in the world, the Star Alliance, led by such heavyweights as Lufthansa and United Airlines, their fellow partners elected to not lift a finger.

Airline alliances are the lifeblood of the airline industry, allowing passengers to earn frequent flier miles, access business lounges and fly on a variety of code-shared flights. When there’s bad weather or an airport strike, the other airlines in the alliance gladly pick up the slack, allowing passengers to be rebooked on another airline. But when one of their members goes belly-up, no such sympathy is shown.

In response to the Spanair move, their “ethical|” response was to allow stranded passengers to pay up to $300 to switch their flights.

Of greater concern, however, are the future passengers. One of the largest conferences in Europe, the Mobile World Congress, is held each year in Barcelona in late February. Annually attended by over 60,000 people, Israeli companies such as CatchMedia and Vringo have planned a large presence at the Congress. Spanair had offered an entire plane to fly in these businesspeople, who then woke up to discover their tickets were now worthless.

Travel agents throughout Israel quickly rebooked their clients on El Al, Iberia and Vueling flights, with the additional cost falling firmly on the shoulders of the passengers. The reasonable travel agencies did all in their power to credit each client in full for the price of their Spanair ticket, taking the responsibility upon themselves to somehow get the prepaid tickets refunded.

Those that purchased online were told by Spanair representatives to write or fax the airline’s headquarters in Barcelona in the feeble hope they could get some type of refund. Rest assured any such refund will take months, if not years, to receive, and nobody can give a straight answer as to what percentage of what was paid will ever be refunded.

One week later, a Friday morning with the sun trying to peek through the clouds, a Malev plane was attempting to fill up her fuel tanks at Ben-Gurion airport when airport authorities requested payment of outstanding debts. The Hungarian-based airline, with over 66 years of service, had a similar request made by the authorities in Dublin.

Fearful that local authorities would seize the aircraft as a guarantee, cash-strapped Malev balked, fearing it would set a precedent and the airline would be unable to finance future requests.

She simply stopped operating, cancelling all Malev flights, leaving more than 7,000 passengers stranded. Although part of another airline alliance, One World, led by BA and American airlines, their partner airlines also chose to turn away and offered no assistance to the stranded passengers.

Why are other airlines refusing to accept El Al in an alliance?

This brings us to our very angry El Al CEO, Mr. Eliezer Shkedi, who spoke recently at the Annual Conference of Israeli travel agents. Although he heads up El Al, he pointedly requested to speak as an Israeli citizen. Enraged and engaged, he told the tortuous tale of El Al’s attempts to join any of the three airline alliances. It wasn’t an issue of El Al’s stringent security conditions, or the fact that she flew only six days a week thus forgoing potential revenue.

It was, pure and simple, due to the fact that El Al is an Israeli airline and, more to the point he asserted, a “Jewish” company. Rarely discussed in public, he told hundreds of travel professionals, airline executives and seasoned journalists that there was simply no way El Al would ever be permitted to join an alliance.

The “start-up nation” that is Israel sorely needs entrepreneurs and creative thinkers in these companies. While I have no problem criticizing government policy, I fervently believe that cogent, cohesive and comprehensive private companies are our best path.

Mark Feldman is the CEO of Ziontours, Jerusalem.

It seems that El Al has made attempts to form alliances with other airlines in order to be able to offer assistance when flights are cancelled or rerouted. According to Mr. Shkedi the CEO of El Al, the airlines have refused to accept an alliance because El Al is a Jewish company. The way I see it these failing airlines don’t care about passenger woes or they would work with any airline to provide a suitable outcome.

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