CMA investigates British Airways and Ryanair over refund complaints

Competition watchdog is concerned that, by failing to offer people their money back, airlines may have breached consumer law

How the CMA announced its investigation on Twitter

How the CMA announced its investigation on Twitter

The Competition and Markets Authority (CMA) is investigating whether British Airways and Ryanair have broken consumer law by failing to offer refunds for flights customers could not legally take.

The CMA opened enforcement cases into both firms, and has written to them detailing its concerns. The move comes after the CMA opened an investigation into the airlines sector in December 2020 following reports that consumers were being denied refunds for flights that they could not legally take.

During periods of lockdown across the UK, British Airways and Ryanair refused to give refunds to people that were lawfully unable to fly, with British Airways offering vouchers or rebooking and Ryanair providing the option to rebook.

The CMA is concerned that, by failing to offer people their money back, both firms may have breached consumer law and left people unfairly out of pocket. It is now seeking to resolve these concerns with the companies, which may include seeking refunds, or other redress, for affected customers.

Andrea Coscelli, chief executive of the CMA, said: “While we understand that airlines have had a tough time during the pandemic, people should not be left unfairly out of pocket for following the law.

“Customers booked these flights in good faith and were legally unable to take them due to circumstances entirely outside of their control. We believe these people should have been offered their money back.”

The firms included in the CMA’s enforcement action are British Airways PLC, BA CityFlyer Ltd, and Ryanair DAC. They now have the opportunity to respond to the CMA’s detailed concerns.

While the Civil Aviation Authority (CAA) leads on consumer protection in the airline sector, the CMA has undertaken extensive action in connection with cancellations and refunds during the pandemic and is well placed to support the CAA on these issues. The CMA and the CAA also share the same enforcement powers to tackle breaches of consumer protection law.

The scope of the CMA’s investigation relates to periods when it was unlawful in one or more parts of the UK for people to travel for non-essential reasons. It covers flights that were not cancelled, and does not cover any other situations.

The CMA said that it should not be assumed at this stage that any of the airlines have breached the law as, ultimately, only a court can decide whether a breach has occurred. As an enforcer under Part 8 of the Enterprise Act 2002, the CMA cannot levy administrative fines, but it can enforce consumer protection legislation through the courts, and where appropriate, require additional measures to improve consumer choice, drive better compliance with the law, or secure redress for consumers

British Airways responded by saying it acted lawfully at all times, offering flexible booking policies while operating vastly reduced schedule due to government-imposed travel restrictions. A BA spokesperson said: “During this unprecedented crisis we have issued well over three million refunds and helped millions of our customers change their travel dates or destinations and we're grateful to them for their ongoing support.

“It is incredible that the government is seeking to punish further an industry that is on its knees, after prohibiting airlines from meaningful flying for well over a year now. Any action taken against our industry will only serve to destabilise it, with potential consequences for jobs, business, connectivity and the UK economy.”

Ryanair said it had looked at refunds on a case-by-case basis and had paid money back “in justified cases”. In a statement, the airline said: “Since June 2020, all our customers have also had the ability to rebook their flights without paying a change fee and millions of our UK customers have availed of this option.”

The CMA has been investigating various parts of the travel industry since July last year. It opened the investigations after getting complaints about refunds, cancellations and price rises following the first lockdown in March. The CMA has received 148,000 complaints overall, with many being about holiday refunds. In April, the CMA threatened legal action against firms offering vouchers instead of refunds for accommodation. During May it warned travel companies that they needed refund customers, saying package holiday firms including Tui, Lastminute.com and Virgin Holidays had refunded a total of £200m.