When a flight is cancelled, can the airline simply rebook passengers and wait for refund requests? In a new Israeli Supreme Court ruling, the answer is no: carriers bear an affirmative duty to actively offer passengers a choice between a refund and an alternative flight. Justice Alex Stein, writing for a unanimous panel, held that withholding that choice is a denial of statutory benefits under the Aviation Services Law and may expose carriers to exemplary damages, even without proof of loss. At the same time, the Court stressed that exemplary damages should be used with restraint, especially where the conduct is particularly serious or accompanied by additional statutory breaches. Eyal Doron, Head of Aviation at S. Horowitz, examines the decision, its reliance on EU Regulation 261/2004, and its practical implications for airlines operating to and from Israel.
