Blue Bird Airways Reaches 800,000-Shekel Settlement Over Wartime Flight Cancellations
Blue Bird Airways has agreed to an 800,000-shekel class-action settlement for passengers stranded abroad during wartime airspace closures, offering affected travelers up to 400 shekels in flight discounts.
A proposed class-action settlement has been submitted to the Tel Aviv District Court involving Blue Bird Airways, establishing an 800,000-shekel compensation fund for passengers whose flights to Israel were canceled due to security closures. The lawsuit centered on allegations that the airline failed to provide mandatory assistance services—such as lodging, food, beverages, or transportation—while travelers were stranded abroad during an extended airspace shutdown.
The legal dispute stemmed from the experiences of plaintiffs who found themselves stranded abroad during Operation "Am Kalavi" in June 2025, when Israeli authorities closed commercial airspace for an unprecedented 12 consecutive days. Petitioners argued they were forced to finance their own prolonged stays out of pocket without receiving entitled statutory benefits under the Aviation Services Law.
Blue Bird Airways strongly contested the claims, maintaining that it operated within the law and bore no legal obligation to provide assistance during unprecedented wartime closures. The airline argued that interpreting the law to require carriers to subsidize the lodging and food of hundreds of thousands of citizens during a multi-week national emergency would impose an unbearable multibillion-shekel burden, essentially creating an unintended state tax on aviation companies.
Terms of the Settlement and Future Implications
Rather than awaiting a prolonged judicial battle or a definitive ruling from the High Court of Justice on similar wartime aviation disputes, both parties reached a compromised agreement recommended by the court. Under the settlement, eligible Israeli residents who purchased round-trip tickets to Israel between February 18, 2022, and the final judicial approval, whose flights were canceled due to security airspace closures, can claim compensation.
Approved claimants will receive up to 400 shekels issued as a discount toward future round-trip ticket purchases on the Blue Bird Airways website. Beneficiaries have a two-year window to redeem their vouchers, after which any unclaimed funds will be transferred to the official state fund for class-action remedies. Attorney Yitzhak Asulin represented the plaintiffs, while attorneys Eli Schimmelwitz and Nitzan Apgin from the Yigal Borochovsky & Co. law firm represented the airline.
