British Airways and Ryanair off the hook over flight refunds
The competition watchdog was looking into whether the two airlines broke the law by failing to offer refunds for flights customers could not legally take during lockdowns.
The CMA announced in June it was investigating British Airways (BA) and Ryanair after the airlines refused to refund people lawfully unable to fly. Instead, British Airways offered customers vouchers or rebooking, and Ryanair provided the option to rebook.
But the CMA now says that “a lack of clarity in the law” makes it insufficiently certain that it would be able to secure refunds for customers who were prevented from flying by Covid travel restrictions.
After a thorough examination of relevant law, and the evidence it had gathered during its investigation, the CMA concluded that the law does not provide passengers with a sufficiently clear right to a refund in these “unusual circumstances” to justify continuing with the case.
Consumer protection law sets out that passengers are entitled to refunds when an airline cancels a flight, because the firm cannot provide its contracted services. However, it does not clearly cover whether people should be refunded when their flight goes ahead but they are legally prohibited from taking it.
Following its review of the law and evidence, alongside expert advice, the CMA concluded that prolonging the investigation couldn’t be justified given the length of time it would take to reach an outcome in the courts and the uncertain outcome.
Andrea Coscelli, chief executive of the CMA, said: “We strongly believe people who are legally prevented from taking flights due to lockdown laws should be offered a full refund and we launched this investigation in the hope that we would be able to secure a positive outcome for consumers.
“However, after considering the relevant law and gathering evidence in our investigation, we have concluded that the length of time that would be required to take this case through the courts, and the uncertain outcome, can no longer justify the further expense of public money.
“Given the importance of this to many passengers who have unfairly lost out, we hope that the law in this area will be clarified.”
The case against BA and Ryanair is different from other instances where the CMA has secured refunds for customers. For example, in the package travel sector, customers are protected by the Package Travel Regulations, which give consumers refund rights that the CMA was able to enforce.
The CMA was also able to take effective action to get consumers refunds in several other sectors, such as weddings and holiday lets. In these cases, the legal position was different because lockdown legislation meant businesses were unable to operate. However, airlines were permitted to continue flights.
Rory Boland, Which? Travel editor, said: “It’s disappointing that the CMA has closed this investigation into airline refunds. It‘s hugely unfair that passengers have been left to shoulder the bill for following the law and protecting public health by staying home, while British Airways and Ryanair have been allowed to hold onto their cash for flights people couldn’t legally take.
“Time and time again regulators have not taken action against airlines because the powers they have are too weak and the time taken to conclude a court case is too long. It’s clear that current regulation is not working and consumers are being let down by gaps and inconsistencies in flight and holiday rules.
“The government must urgently set out how it plans to review travel regulations and strengthen consumer protections. Plans to give the CAA greater powers to tackle the consistent lawbreaking we saw on refunds from some airlines can’t come soon enough. These must be sufficiently tough, and give the ability to fine airlines directly for past behaviour to ensure they won’t step out of line again.”