The aviation regulator is reviewing the refund policies of 18 UK airlines and a number of international airlines which operate flights to and from the UK.

As part of the review which began in May, the CAA said it doesn’t expect airlines to systematically deny consumers their right to a refund, though it does support airlines offering vouchers and rebooking alternatives “where it makes sense for the consumer”.

Airlines have been reminded they must provide cash refunds to passengers who request this where a flight has been cancelled. And given its spotlight on the sector, it is considering whether any further action needs to be taken to protect consumer rights.

It comes as the review found a number of airlines are paying refunds quickly and don’t have a big backlog of requests. While regulations state refunds should be paid within seven days of the request, the CAA said there are “operational challenges” which make this difficult to meet. It will continue to monitor these airlines.

It placed a number of airlines into a ‘requiring transparency improvements’ group. This was based on customer complaints where the airlines did not appear to be providing refunds at all. After contacting the airlines, it said a number have introduced new systems for processing refunds though added more work needs to be done to inform passengers they’re entitled to a refund.

The CAA said: “We will allow these airlines a short period to make the necessary improvements before we reach a definitive view on their performance.”

Its final grouping – ‘requiring processing time improvements’ – the CAA included airlines with substantial backlogs which “are taking too long to process refunds”.

It said this group includes some major carriers and they have been asked to provide commitments to speed up the timescales.  The CAA said where performance doesn’t improve, “it will not hesitate to take enforcement action”.

A statement by the CAA, read: “Only a minority group of airlines have been consistently providing consumers with refunds in an acceptable timeframe, however we have noted a marked improvement across most airlines since our review commenced. We expect this direction of travel to be maintained.”

‘Airlines breaking refund law for months’

Rory Boland, editor of Which? travel, said: “This update from the regulator confirms what we have been highlighting to it for months – that airlines are continuing to disregard the law and withhold huge sums of money from their passengers during a time that has placed incredible stress on people’s financial and emotional wellbeing.

“The time for monitoring and performance reviews has long passed. Airlines have been breaking the law on refunds for months, and to delay action for any longer goes against the regulator’s claims to be on the side of consumers. We need to see urgent enforcement action to hold airlines to account, set a higher standard for the months ahead, and demonstrate that there are real consequences to breaking the law on refunds.”