Antitrust Officals Raid El Al Offices Over Alleged Holocaust School-trips Scam

Israeli parents paid over $1,500 for a week’s trip for their kids to Poland, while flights on the general market cost between $200 and $300.

Israeli high-school students visiting Poland as part of their Holocaust-related trip, in 2011.
AP

Antitrust Authority inspectors appeared at the offices of El Al Airlines and its subsidiary Sun d’Or Tuesday, where they gathered documents and summoned several senior managers for investigation.

The authority confirmed that the raid was linked to the ongoing investigation into a suspected monopoly on organized school trips to Poland. It added that as part of the probe, agents searched the offices and detained several officials.

El Al gave a statement to the Stock Exchange Tuesday that “the company has no information about the circumstances under investigation and will not be authorized to publish additional information at this time except with the permission of the Antitrust Authority.”

Last month, nine senior Israeli tourism officials were arrested in an undercover investigation by police and the Antitrust Authority. Pinchas Ginsburg, CEO and owner of Hillel Tours, who also owns 10 percent of El Al stock and is a member of the El Al board of directors, was arrested in the case. Ginsburg is suspected of money-laundering, fraud and restrictive practices.

Eight other senior figures in the tourism industry were arrested with him: Shimon Regev, CEO of Academy Travel; Aharon Turovitz, an Academy Travel department head; Zvi Sa’ar, in charge of Poland trips at Hillel Tours; Avi Chen, responsible for Poland trips at Ayala Travel; Zohar Edelman, CEO and owner of Tevel Travel; Moshe David Hartman, in charge of Poland trips at Diesenhaus; and Nahman Keidar and Ayelet Jungstedt of Gesher Laolam.

The victims of these alleged actions over the years have been the parents of the 28,000 young people a year who go on school trips to Poland, and who had to pay as much as 6,000 shekels (over $1500) for a week’s trip to Poland, while flights to Warsaw on the general market cost between $200 and $300.

For two months, police and the Antitrust Authority have been investigating suspicions that officials in leading travel firms in marketing and organizing flights and services for school trips to Poland have worked together to prevent competition, in breach of the Antitrust Law.

It is believed that these officials, who won an Education Ministry tender as franchisees to conduct the trips, coordinated pricing and divided up the market so schools would choose them, without any real competition in pricing.

Last year the Education Ministry lowered the price of the trip to 4,200 shekels, but the travel companies that took part in the tender continued to market the higher prices.

As a result, the Education Ministry set the maximum price for the trip at 4,338 shekels to 4,950 shekels.