--- title: "Israel travel agency refund fee banned, October 2026" url: https://flightcompensations.com/blog/israel-supreme-court-travel-agency-fees-refund-2026-10-05 author: "Jaacov Sonenblick" published: 2026-10-06 updated: 2026-10-06 publisher: FlightCompensations summary: "Israel's Supreme Court has ruled that a travel agency may not keep a handling fee out of the refund for a cancelled flight. The judgment applies now, and it leaves EU261 and UK261 compensation untouched." --- # Israel travel agency refund fee: the Supreme Court bans handling fees on cancelled flights Israel's Supreme Court has ruled that a travel agency may not keep a handling fee out of the refund for a cancelled flight. The judgment applies now, and it leaves EU261 and UK261 compensation untouched. ![A travel agency counter in Tel Aviv or Jerusalem with an empty check-in desk and cancelled flight information displayed, photographed in natural daylight through large windows, conveying the moment when refund policies shifted under court order.](/api/assets/cmux4jysu0000l8vf6qyaq03j) **Israel travel agency refund fee deductions** **are now banned** on cancelled flights. The Israeli Supreme Court flight refund ruling says a travel agency may not keep part of the money an airline refunds. No source has reported the exact decision date. A judgment still applies from the moment the court issues it, not from some future date. Fixed EU261 compensation stays separate and unchanged. The case turned on a single question: who was responsible for the money? The airline cancelled the flight, so the airline owed the refund. The agency merely passed that money through. Once the court settled this, the fee had nowhere to sit. ## Is the Israel travel agency refund fee still allowed on a cancelled flight? No. The Supreme Court held that once the airline has transferred the refund money to the agency, the agency must pass it on to the passenger in full, as [Calcalist](https://www.calcalist.co.il/local_news/article/ryewgrgjgl) reported. Israeli agencies call this deduction *dmei tipul*, a handling fee. The court does not permit it on a cancelled flight. Justice Gila Kanfi-Shteinitz wrote the ruling, and Justices Yael Vilner and Dafna Barak-Erez agreed. This is the first time the court has settled the point. Commentators describe the dmei tipul cancelled flight question as settled by precedent, not just one passenger's win. Two things follow for anyone who booked through an agency. The refund is the ticket money, including fees and taxes. It is not a payment for the agency's trouble. The agency may not trim it on the way. ## What did Doron Ben-Shimon's case against Issta over a Wizz Air ticket establish? Doron Ben-Shimon bought a ticket to Warsaw on Wizz Air through Issta for 1,087 shekels. Wizz Air cancelled the flight, Issta refunded 911 shekels and kept the difference as a handling fee. A small claims court rejected his claim. The Tel Aviv District Court then rejected his appeal, [Bizportal](https://www.bizportal.co.il/takdin/news/article/20044059) reported. The Supreme Court later agreed to hear a rare third-round appeal. The deduction was 30 dollars. The Supreme Court ordered Issta to repay it with interest and linkage. It also ordered Issta to pay 5,000 shekels in legal costs, according to [Ynet](https://www.ynet.co.il/economy/article/bjwgkrfizl). If a low-cost carrier cancelled on you, it is worth reading about [what Wizz Air owes when it cancels a flight booked through an agency](/airlines/wizz-air). That page explains what to chase, and from whom. ## Why does Israel's Aviation Services Law decide this, not EU261? Because the agency charges the fee, not the airline, Israeli consumer law sets the agency's duties here, not EU261. The Aviation Services Law requires the operator or organiser to return the full ticket amount. That includes fees, levies and taxes, within 21 days of a written request. Section 15 obliges the agency to approach the airline on the passenger's behalf, [Mako](https://www.mako.co.il/news-money/2026_q4/Article-dffd9a687bc01a1027.htm) reported. The court treated that as part of the service the agency already sold, not an extra job to bill for. Regulation (EC) 261/2004, known as EU261, is a different instrument that still applies on top of any ticket refund. It sets fixed compensation of €250, €400 or €600 by distance. This applies to cancellations and arrival delays of three hours or more. The UK equivalent pays £220, £350 and £520. None of that changes here. | Money at stake | Who owes it | Effect of the ruling | |---|---|---| | Ticket refund after a cancellation | The airline, passed on by the agency | Must reach the passenger in full, with no handling fee | | EU261 compensation: €250 / €400 / €600 | The airline | Unchanged, and separate from the refund | | UK261 compensation: £220 / £350 / £520 | The airline | Unchanged, and separate from the refund | Getting your ticket money back does not use up the fixed payout: see [how the fixed compensation sits alongside your ticket refund](/passenger-rights/eu261). ## Does the COVID-era permission to charge a fee mean past deductions were legal? The court said the opposite, and used the COVID-era rule as its reasoning. During the pandemic, a temporary regulation expressly allowed agencies to charge for this work, for a limited period. Justice Kanfi-Shteinitz reasoned that if the deduction had always been lawful, the legislature would not have needed to grant special permission for it. The legislature allowed the fee explicitly and put a time limit on it. She held that the statute's later silence amounts to a prohibition, not a gap. That reasoning overturned two lower courts, which had reached contradictory results on the same question in earlier cases. The reporting available does not spell out how far back the judgment reaches. No source reports whether agencies must repay fees withheld on cancellations years ago, or only those withheld going forward. ## How much could Issta and other Israeli agencies now owe passengers? Coverage of the ruling says the agency will have to return millions of shekels to customers, [Ice](https://www.ice.co.il/law/news/article/1132522) reported. The scale matters because flight cancellations have been common, including for security reasons. Agencies applied the same deduction across a large number of bookings. The dispute started over 30 dollars and ended as a precedent for passengers generally, [TheMarker](https://www.themarker.com/law/2026-10-06/ty-article/.premium/000001a1-1101-dd49-a5ff-d39306c00000) reported. Justice Barak-Erez added that agencies can price in advance for the possibility that they will have to help return money to a passenger. Several things remain unclear. No source reports whether Issta or other agencies will refund withheld fees automatically, or will make each customer file a small claim. No one has published a timeline for those repayments. Issta, other agencies and the Israeli travel agents' body have not responded publicly. ## What should I do if an Israeli agency deducted a fee from my cancelled-flight refund? 1. Find the booking confirmation and the refund notice, and work out the gap between what you paid and what the agency paid back. 2. Write to the agency. Name the flight, the cancellation and the amount withheld, and ask for an Issta handling fee refund or its equivalent at your agency. 3. Keep the written request, because the 21-day clock in the Aviation Services Law runs from a written approach. 4. Treat a travel agency commission on a flight cancellation in Israel as a separate issue from the airline's own liability, and claim both. 5. Check the flight itself, because a cancellation can also carry fixed compensation on top of the money back. The quickest way to see whether the airline owes you more than the ticket price is to [check whether your cancelled flight also qualifies for compensation](/claim). The 14-day notice rule and the refund-or-rerouting choice are set out in [the refund rules a cancelled flight already carries under EU261](/flight-cancellation-compensation). If your flight eventually departed but landed late, the three-hour arrival test is explained in our [flight delay compensation guide](/flight-delay-compensation). ## Frequently asked questions ### Can I get back a handling fee Issta or another Israeli agency deducted from my refund? Ask for it in writing. The Supreme Court held that a refund the airline transfers must reach the passenger in full, so the agency may not keep the deduction. No source yet reports whether agencies will repay old deductions automatically or require individual small claims. ### Does the Supreme Court ruling apply to agencies other than Issta? The judgment settles the legal question, not just one company's conduct, so it applies to travel agencies generally under Israel's Aviation Services Law. Issta was the defendant, and the court ordered it to repay the fee with interest and linkage, plus 5,000 shekels in costs. ### What if my flight was cancelled by an airline other than Wizz Air? The ruling targets the agency's deduction, not the airline's identity. Wizz Air cancelled the flight in this case, but the principle is that refund money passed to an agency belongs to the passenger in full, whichever carrier cancelled. ### Can I still claim interest and linkage on a fee that was withheld years ago? The court awarded Ben-Shimon interest and linkage from the date he filed his claim. No source reports whether the ruling reaches cancellations that predate the judgment, so a very old deduction may still be disputed. Keep your booking and refund paperwork either way. ### Do I still get EU261 compensation if I booked through an Israeli travel agency? Yes. The airline owes fixed compensation of €250, €400 or €600 by distance, separate from your ticket refund. Booking through an agency does not remove this right, and receiving a refund does not cancel your claim to it. ## Sources - "בעליון הבינו את הגזל": נלחם נגד איסתא על 30 דולר ויצר תקדים לנוסעים — TheMarker, 2026-10-06: https://www.themarker.com/law/2026-10-06/ty-article/.premium/000001a1-1101-dd49-a5ff-d39306c00000 - טלטלה בעולם התעופה: סוכנות הנסיעות תחזיר מיליוני שקלים ללקוחות — ice (אייס), 2026-10-06: https://www.ice.co.il/law/news/article/1132522 - הטיסה בוטלה? העליון קובע: סוכנות הנסיעות לא יכולה לגזור קופון מההחזר — calcalist, 2026-10-06: https://www.calcalist.co.il/local_news/article/ryewgrgjgl - פסק דין תקדימי: סוכנות נסיעות לא יכולה לגבות דמי טיפול על טיסה שבוטלה — ynet.co.il, 2026-10-06: https://www.ynet.co.il/economy/article/bjwgkrfizl - העליון: סוכנות נסיעות לא תגבה עמלה על החזר דמי טיסה — mako, 2026-10-05: https://www.mako.co.il/news-money/2026_q4/Article-dffd9a687bc01a1027.htm - העליון: סוכנות נסיעות לא תגבה עמלה על החזר דמי טיסה — ביזפורטל, 2026-10-05: https://www.bizportal.co.il/takdin/news/article/20044059 Read the full page with the claim check at https://flightcompensations.com/blog/israel-supreme-court-travel-agency-fees-refund-2026-10-05