CAA blasts Virgin as report paints shoddy picture of airline refunds policy

Only three airlines – Jet2, American Airlines and United – have been providing prompt cash refunds after Covid crippled the aviation industry with several, TUI among them, failing spectacularly.

A report by the Civil Aviation Authority named and shamed several airlines which have either dragged their feet over refunds or failed to offer them at all.

But despite the CAA’s insistence it was holding airlines to account, Which? Travel, said passengers continue to be "fobbed off".

According to the study of 18 airlines,Virgin Atlantic was the chief culprit. It has responded to the CAA’s criticism by acknowledging it could do better and will work hard to claw back consumer confidence.

Investigations by the CAA found Virgin was initially taking 60 days to hand money back to passengers. But its performance grew "significantly worse" with refunds blowing out to 120 days.

While Virgin has committed to shorten the wait times to 80 days for claims made in August, 60 days in September and 30 days in October, the CAA described it as "still a lengthy wait".

"We will continue to work with Virgin Atlantic and push them for further improvements to the timescales," the CAA said. "Given the extended timescales even in September and October, we will be monitoring Virgin’s performance particularly closely and will consider the use of formal enforcement powers if necessary."

TUI had also "not been processing refunds quick enough", the CAA said.

Its policy on cancelled flights was to automatically issue a credit note, telling passengers they would have to wait 28 days from the receiving the note before they could claim a refund which would then take a further 28 days to be processed.

TUI told the CAA it has eliminated the automatic issuing of a credit note and was aiming to refund passengers within 14 days of a flight being cancelled.

EasyJet and Ryanair meanwhile also failed to provide prompt refunds with passengers waiting three months and 10 weeks respectively. 

Ryanair claimed that 90% of its backlog would be cleared by the end of July, while EasyJet said it is now processing refunds in less than 30 days.

EasyJet also said it expects its current backlog to be processed by early August.

BA performed well, according to the report, with a "relatively small backlog" of refund requests.

However, customers experienced difficulties in contacting the airline to notify them of their refund requests.

"The CAA has also been unable to speak to a BA agent to discuss refunds, with its calls terminated following a recorded message," the report said.

"British Airways has now made some changes to its customer helpline to ensure that calls are no longer terminated after a recorded message.

"We will continue to monitor whether this change provides improvements for passengers and how long it takes for passengers to get through to an agent."

Only Jet2, American Airlines and United fared well in the CAA’s study, with all three providing prompt refunds and having only a small backlog of requests.

"Our review identified three airlines were doing a good job of refunding passengers in a reasonable time frame and were making it relatively easy to request a refund," the CAA said in its report.

"We also identified a number of compliance issues and we have worked informally with airlines to achieve improvements for passengers. We have ensured that airlines are offering the choice of a refund and making it clearer to passengers what their options are and how to request a refund.

"We have also achieved improvements in call centre performance. A number of major airlines have also committed to speeding up the time it is taking process refunds and we welcome the steps those airlines have put in place.

"We will continue to monitor those airlines and continue to push for further improvements. We will also consider if enforcement action is appropriate if airlines fail to meet the commitments they have made to us and their passengers.

"Based on complaints data we have received we have also sent out a warning letter to around 30 other airlines setting out our expectations of compliance."

But Which? Travel questioned CAA claims it was clamping down on airlines

Editor Rory Boland said the regular was "failing the consumers it is supposed to protect".

"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," he said. "These airlines will now feel they can continue to behave terribly having faced no penalty or sanction.

"It is obvious that the CAA does not have the right tools to take effective action against airlines that show disregard towards passengers and the law, but more worryingly, it’s not clear the regulator has the appetite to use them."

He said the government should use the opportunity to bring in "much-needed reforms", including handing regulators greater powers to take "swift and meaningful action".

"But consumers need assurances that these will actually be used against lawbreaking companies," he said.

By Steve Jones, Contributing Editor