Charter flight operators in Israel must post bank
guarantees with the Civil Airport Administration in the event
that a flight doesn't materialize so that the Administration
can provide alternate tickets in such cases, to protect
consumers. This agreement was concluded after the relatively
unruly charter market caused a number of Israelis to be
stranded in foreign airports. Until now, however, regular
commercial airline companies were not obligated to guarantee
their tickets. The assumption was that there was nothing to
worry about, and that these airlines would surely provide the
promised service.
This complacency however, was detrimental to Tower Air
clients who were left with worthless tickets when Tower Air
suddenly went bankrupt on 27 Nisan (May 2). It is estimated
that 5000 Israelis have now worthless Tower tickets for which
they will not be able to receive refunds. Tower Air had
recently received the protection of the American court and
was operating under Chapter Eleven plan, in the hope that it
could salvage the business.
Nonetheless, only last week it offered customers a
ticket with a return flight with no time limit for only 1500
dollars. This bargain was advertised although by then Morris
Nachtomi, Tower Air owner, must have already known what was
likely to happen. Travel agents should not be suspected of
knowing about this plan which caused thousands of Israelis to
lose their money and others to suffer inconvenience.
Approximately 1500 passengers were stranded in airports
where they were supposed to board Tower planes either to
Israel or the United States. One flight that originated in
Los Angeles and was bound for Israel was suddenly terminated
at the interim stopover in New York.
Reporters at Kennedy Airport in New York City described
passengers who had already been checked in and were without
their suitcases and suddenly heard Tower Air's announcement
that the flights had been terminated. Passengers who had come
with Tower from Los Angeles and had stopped off in New York
were told that there was no plane to take them further, and
that they would have to remain in the New York
airport.
No Tower Air representative came to the aid of the
passengers, many of them chareidi families with small
children. Israeli Consulate representatives tried to organize
sleeping accommodations. They called Hatzoloh which arrived
with large vans and organized places to sleep for the
stranded people. Forty embittered passengers remained in the
airport the entire night and apparently the following
morning.
El-Al, TWA and Continental Airlines, the remaining
carriers between the U.S. and Israel, have said that they
will sell holders of Tower Air tickets one-way tickets at a
reduced rate.
The announcement of Tower's closing was a surprise, and
came after creditors in the United States, primarily General
Motors, refused to extend Tower any more credit since the
company offered no convincing plan for returning to
profitability. Companies which supplied Tower Air with fuel
and other supplies had recently demanded payment in cash for
Tower.
Travel agents estimate that the prices of tickets to the
Untied States will likely rise significantly. Most of the
tickets for the summer season have already been sold, and the
absence of Tower Air, which was a major carrier on the Israel-
America line, will result in heavy pressure on the other
companies. Arkia, which has begun to operate flights to the
United States, will purchase a large Boeing plane in order to
accommodate more passengers. Tower's aggressive pricing was a
boon to consumers, many of whom were willing to suffer its
sometimes lower level of service.
