Regulator names and shames airlines over poor refund process
The coronavirus pandemic has hit airlines particularly hard, with many grounding their fleet and cancelling huge numbers of flights.
However, according to the regulator, the Civil Aviation Authority, many have been slow in their response to customer refund requests.
Under EU regulation EC261/2004, airlines must offer cash refunds to customers in the event of cancellation, but the CAA found many were offering a voucher or the option to rebook.
It launched a review on airline refunds and has now published an airline-by-airline summary of how they have handled the process during the pandemic.
Just three of the 18 airlines were praised – American Airlines, Jet2 and United Airlines – for consistently processing cash refunds quickly and having only a small backlog of refund requests.
But easyJet, Ryanair and Virgin Atlantic are among the airlines which have been named and shamed over their inadequate refund process.
On easyJet, the CAA said initially it was taking up to 90 days to process refund requests while under the EU regulations, it should take seven days. However, it has confirmed to the CAA that it is able to process requests in less than 40 days, adding that it expects to clear the current backlog by early August.
The CAA said Ryanair was initially taking 10 weeks or longer to process requests which it was “not satisfied with” and so Ryanair was requested to provide commitments to reduce this timescale which it did earlier this month.
Ryanair also confirmed that 90% of its backlog would be cleared by the end of July with all refund claims made in April to be processed by 15 July and most of the claims made in May by the end of July.
When it came to Virgin Atlantic, the regulator said it was initially taking 60 days to process refunds though it committed to returning money to customers within 120 days. “The CAA was not satisfied with this level of performance and requested that Virgin Atlantic provide it with commitments to reduce the time taken to process refunds,” it noted.
Virgin has now committed to reduce the maximum time taken to process a refund and it expects to process all claims made in August within 80 days, all claims made in September within 60 days and all claims made in October within 30 days.
The CAA added this is still “a lengthy wait for consumers” and said it will be monitoring the airline’s performance closely as it considers using formal enforcement powers if necessary.
Other airlines on the hit list included Aer Lingus, Air Canada, Air Transat, Emirates, Etihad, Logan Air, Malaysian Airlines, TUI, Turkish Airlines and WestJet.
British Airways is in the half-way house as the CAA said it had a relatively small backlog of refund requests and it has processed them relatively quickly – around 30 days or less. However, it noted that passenger complaints centred around difficulties contacting the airline for a refund.
In its own sample calls to the airline, the CAA was unable to speak to an agent to discuss refunds, with its calls terminated following a recorded message. British Airways has now made some changes to its customer helpline to ensure calls are no longer terminated after a recorded message.
The last of the 18 airlines – Eastern Airways – has a small customer number and wasn’t impacted by cancellations to the same extent as other airlines in the review. The CAA said it typically processes requests within 30 days and its website is clear that passengers on cancelled flights are entitled to a refund, as well as information on how to claim it.
‘There is still work to do’
The CAA said that since it launched its review, all UK airlines are now paying refunds, call centre wait times have reduced and customer service messaging is clearer on consumers’ rights to a refund for cancelled flights.
But it has today written to a further 30 major European and international airlines that operate to and from the UK to warn them about the consequences of denying a refund for customers, namely that it can take action against them if necessary.
Richard Moriarty, chief executive of the UK Civil Aviation Authority, said: “The airlines we have reviewed have responded by significantly enhancing their performance, reducing their backlogs, and improving their processing speeds in the interests of consumers.
“Although we have taken into account the serious operational challenges many airlines have faced, we have been clear that customers cannot be let down, and that airlines must pay refunds as soon as possible.
“There is still work to do. We have required commitments from airlines as they continue the job of paying customer refunds. Should any airline fall short of the commitments they have made, we will not hesitate to take any further action where required.”
Rory Boland, editor of Which? Travel, said the regulator is “failing the consumers it is supposed to protect”.
He said: “The reality is that people are still owed millions of pounds in refunds, are facing financial and emotional turmoil, and continue to be fobbed off by a number of airlines who have been brazenly breaking the law for months. These airlines will now feel they can continue to behave terribly having faced no penalty or sanction.
“The government must use this opportunity to bring in much-needed reforms, including giving regulators greater powers to take swift and meaningful action, but consumers need assurances that these will actually be used against lawbreaking companies.”