The UK’s competition watchdog is investigating whether airlines breached customers’ rights by not offering refunds for flights they were unable to board during the pandemic.
The Competition and Markets Authority said it would examine situations where airlines continued operating flights despite passengers being unable to travel lawfully for non-essential purposes.
The investigation is a fresh problem for airlines, which have faced criticism for their response to the huge backlog of refunds built up following a surge of flight cancellations during the first wave of coronavirus in the spring.
The regulator specifically highlighted the second lockdown in November, which banned non-essential travel such as going on holiday. Some airlines continued to operate flights during this period without offering full refunds, arguing that many people still needed to travel for work.
The regulator “is aware that, in some cases where flights were not cancelled, customers were not offered refunds even though they could not lawfully travel”, it said. Many passengers were given the option of rebooking or taking a voucher instead.
The CMA will write to “a number of airlines” to learn more about their approaches to refunds but did not name any specific carriers on Wednesday.
Airlines across the globe have endured a plunge in revenues and huge losses this year as the spread of infection and changing restrictions caused passenger numbers to plummet.
“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,” said Andrea Coscelli, CMA chief executive.
The CMA has already written to more than 100 package holiday companies to remind them of their obligations to comply with consumer protection law over holiday refunds.
Virgin Holidays in October committed to refunding £203m to passengers following an investigation by the CMA, while LoveHolidays on Tuesday committed to paying £18m to customers waiting to get their money back.
The Civil Aviation Authority, which regulates the UK industry, has held its own review into refunds during the first wave of the pandemic, when the vast majority of airlines’ fleets were grounded. It found that a number of carriers had not been providing cash refunds and were instead only offering customers a voucher or rebooking, although they changed their practices following the CAA’s intervention.
The regulator said the biggest problem for customers was the length of time it was taking airlines to pay out to customers, given the huge backlog of refunds and logistical difficulties of operating during the pandemic.
Airlines UK, the industry trade body, has been contacted for comment.