How can travel agents charge handling fees even when flights are canceled?

Travel agents became concerned that even if a contract between an agent and a customer allows a handling fee, they would be faced with lawsuits from customers.

 Illustrative image of an airplane. (photo credit: PXHERE)
Illustrative image of an airplane.
(photo credit: PXHERE)

A travel agent will now be able to charge a reasonable handling fee even in the event that the flight is canceled, according to a decision by Adv. Dror Strum, former Commissioner of the Israel Antitrust Authority and CEO of Israeli Institute for Economic Planning.

Handling fees may cost hundreds of shekels per flight. The Israel Association of Travel Agencies and Consultants (IATAC), headed by CEO Tali Laufer, approached Strum following complaints from passengers who said they were required to pay the handling fee even though their flight was canceled.

What happened to the clients?

The appeal was made during a massive wave of flight cancellations that began when the coronavirus pandemic cut flights and travel regulations changed constantly.

The concern of travel agents was that even if a contract between an agent and a customer explicitly states that the agent is entitled to a handling fee, agents may be faced with lawsuits from customers.

 Travelers stand in line to check-in at Ben Gurion International Airport, on June 14, 2022. (credit: AVSHALOM SASSONI/FLASH90) Travelers stand in line to check-in at Ben Gurion International Airport, on June 14, 2022. (credit: AVSHALOM SASSONI/FLASH90)

Strum responded to the IATAC: "There’s nothing wrong with a travel agent charging a reasonable handling fee in the event of flight cancellation if agreed between the agent and customers and specified in advance at the time tickets are bought."

According to him, "the temporary regulations published during the coronavirus pandemic period explicitly indicate the possibility of collecting handling fees and in this respect there was no change in the law."  

To justify his opinion, he cited legal precedents that were standard in the sheltered housing industry.