The UK’s Competition and Markets Authority (CMA) has abandoned its investigation into refunds for customers of British Airways and Ryanair. It was investigating whether it was unlawful for the airlines to offer rebooking and vouchers rather than cash refunds when customers were legally unable to fly, but concluded that the law is not clear enough to make a judgment in favor of the consumer.
No cash refunds for passengers
Customers who had their flights canceled as a result of the COVID pandemic may not be able to claw back their cash, after the UK’s Competitions and Markets Authority (CMA) closed its investigation into the issue. The CMA was investigating whether the airlines should have offered cash refunds during periods of lockdown in the UK, when non-essential travel was banned.
The investigation began in June, after a swell in complaints from passengers and consumer groups. Complainants argued that airlines should have provided refunds, given that they were lawfully unable to take their flights. Rather than issuing refunds, British Airways offered its displaced customers vouchers for future flights, whereas Ryanair only offered them the option to rebook onto another service with no charge.
Consumer protection law states that airlines must refund their passengers when they cancel a flight due to being unable to provide its contracted service. But the lockdown situation was somewhat different, as the CMA explained,
“However, it does not clearly cover whether people should be refunded when their flight goes ahead but they are legally prohibited from taking it.”
The muddiness of the legalities surrounding this issue has led the CMA to believe that the only way to reach a resolution would be through a long and costly court battle. CMA chief executive Andrea Coscelli explained the reasoning for dropping the case as,
“… 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.”
A welcome break
For the airlines concerned, the end of this investigation will be welcome news. The idea of needing to participate in a drawn-out court battle, and potentially having to issue thousands of refunds, is not what the airline industry needs right now.
Ryanair commented on the outcome, stating,
Ryanair welcomes the CMA’s decision to close its investigation. We operated a limited schedule during UK lockdowns for customers who travelled for essential reasons. Passengers had the option to change their bookings without paying the flight change fee and many availed of this option.
Although the outcome was perhaps not what consumers were hoping for, Coscelli was clear that his personal opinion was that refunds should have been issued. He 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.
“Given the importance of this to many passengers who have unfairly lost out, we hope that the law in this area will be clarified.”
For other tourism and leisure-related industries, the process of getting customers refunded has been much easier. Weddings, tour operators, holiday lets and suchlike were all prevented by law from operating their contracted services. Airlines, on the other hand, were permitted to continue flying, making it difficult to demand cash refunds.