Competition Watchdog Launches New Airline Refund Investigation

The airline companies, along with holiday operators, have been under growing pressure by angry customers for stalling over offering cash refunds for disrupted flights.

As a result, The UK regulator, Competition and Markets Authority (CMA), has recently launched an airline refund investigation. The move comes as part of ongoing work by the authority in relation to holiday refunds during the COVID-19 pandemic.

The CMA will look into the failure of airlines to offer cash refunds to passengers when they could not travel due to the pandemic, particularly focusing on cases during the second lockdown when people were unable lawfully to travel for non-essential purposes.

From 5 November until 2 December, people living in England were not allowed to travel unless for work, education or other legally permitted reasons. This meant any holiday flights during that period could not be taken by passengers. However, airlines were allowed to continue to operate for people who had a valid reason to travel. Consequently, some air companies decided not to cancel any of their scheduled flights during that period.

The CMA reports that in such cases where flights were not cancelled, customers were not offered cash refunds even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher. Therefore, the concern is that some airlines may have breached consumer rights by refusing cash refunds, leaving people unfairly out of pocket. CMA has opened the investigation to examine the matter further and determine whether there has been a breach of consumer rights by certain airlines.

The authority acknowledged the financial strain the airline sector was under while emphasising that “they have a responsibility to treat consumers fairly and abide by their legal obligations” regardless.

The CMA will work with the UK Civil Aviation Authority, which leads to consumer protection in the airline sector, throughout the investigation.

The regulator said it intends to write to a number of airlines – the identities of which have not been disclosed – to request information about their approaches to refunds for consumers prevented from flying due to lockdown restrictions. Following a careful analysis of the evidence, the CMA will decide whether to take enforcement action against individual carriers.

While both the businesses and the people are facing financial hardship due to the Covid-19 restrictions, refunds have been one of the most difficult consumer law issues resulting from the pandemic. Thus, it is no surprise that the fight for flight refunds has been a nightmare for both sides. Even before the pandemic, there were systematic problems between airlines and travel firms, making the whole refund process bureaucratically difficult. Now with the ambiguity in regard to where the law stands with the continuing flights and government advising against travel, the process becomes more complicated. The investigation and any legal action that may follow after will hopefully bring the clarity both the public and the airline industry wants.

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