Airlines under investigation for refusing flight refunds

The Competition and Markets Authority is investigating whether airlines have breached consumers’ legal rights by refusing to offer cash refunds for flights they could not lawfully take.

The move comes as part of ongoing work by the CMA in relation to holiday refunds during the coronavirus pandemic.

The investigation will consider situations where airlines continued to operate flights despite people being unable lawfully to travel for non-essential purposes in the UK or abroad, for example during the second lockdown in England in November.

The CMA says it is aware that in some cases where flights were not cancelled customers were not offered refunds even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher.

In a statement this morning it said: "The CMA recognises that the airlines sector, like many others, is under strain due to the pandemic. However, it is concerned that certain airlines may have breached consumers’ legal rights by failing to offer cash refunds, leaving people unfairly out of pocket, and has therefore opened an investigation to examine the matter further."

Chief Executive Andrea Coscelli said: "We will be carefully analysing all the evidence to see whether any airlines breached consumers’ legal rights by refusing people cash refunds for flights they could not lawfully take.

"We recognise the continued pressure that businesses are currently facing, but they have a responsibility to treat consumers fairly and abide by their legal obligations."

The CMA will be working closely with the Civil Aviation Authority during its investigation.

While CAA leads on consumer protection in the airline sector, the CMA has undertaken extensive action in connection with cancellations and refunds during the pandemic. Yesterday it announced that it had ordered online travel agent loveholidays to refund clients for the airfare element of cancelled packages, even in cases where the OTB hasn’t been refunded by the airlines.

The CMA is writing to a number of unnamed airlines requiring information to understand more about their approaches to refunds for consumers prevented from flying by lockdown.

"Following a careful analysis of this evidence, the CMA then will decide whether to launch enforcement action against individual airlines," it said.

Most airlines have refused customers cash refunds for flights unless the services have been cancelled. Instead, some have offered passengers unable to travel due to lockdowns the option of changing their flights or they have given vouchers instead.

Which? Travel Editor Rory Boland said: "We expect the hundreds of thousands of people who were simply following government rules by not taking flights to be issued refunds, or given the option of a refund, as a result of this investigation."  

By Linsey McNeill, Editor (UK)