THE trading regulator has launched an investigation into whether airlines have breached consumers' legal rights by failing to offer cash refunds for flights they could not lawfully take.
The move comes as part of ongoing work by the Competition and Markets Authority (CMA) in relation to holiday refunds during the coronavirus (COVID-19) pandemic.
The investigation will consider situations where airlines continued to operate flights despite people being unable lawfully to travel for non-essential purposes in the UK or abroad, for example during the second lockdown in England in November.
The CMA said it was aware that, in some cases where flights were not cancelled, customers were not offered refunds even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher.
The CMA said it was aware that, in some cases where flights were not cancelled, customers were not offered refunds even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher.
There have been calls for months for an intervention over what some describe as the "broken airline complaints system" as travellers fight for their rights to a refund over flights that could not be taken or were cancelled because of the Covid-19 pandemic.
Recent research revealed that many airlines and tour operators have 'broken the law' by not issuing refunds for cancelled trips, despite assuring the aviation regulator, the Civil Aviation Authority that they would sort things out.
There have been growing concerns that holiday firms have held back billions of pounds in refunds, as they battled with the worst financial crisis their industry has ever faced.
Holiday companies should offer refunds within 14 days while for airlines it is seven days, but many consumers were reporting throughout the last nine months still waiting for their cash months after trips were cancelled because of the coronavirus.
In August the Civil Aviation Authority (CAA) said it had found airlines had upped their game when it comes to providing refunds following a review of the refund policies and performance of UK airlines and three of the largest international operators to the UK.
But Which, the consumer organisation found evidence in October taht airlines were "reneging" on promises about how they would improve their refund processes, including from some passengers who have been left out of pocket since March.
The CMA has said it "recognises" that the airlines sector, like many others, is "under strain" due to the pandemic.
However, it said it was "concerned that certain airlines may have breached consumers’ legal rights by failing to offer cash refunds, leaving people unfairly out of pocket", and has therefore opened an investigation to examine the matter further.
Andrea Coscelli, chief executive of the CMA, said: "We will be carefully analysing all the evidence to see whether any airlines breached consumers’ legal rights by refusing people cash refunds for flights they could not lawfully take.
"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."
The CMA will be working closely with the UK Civil Aviation Authority as it progresses its investigation.
While the Civil Aviation Authority (CAA) leads on consumer protection in the airline sector, the CMA said it 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 said that both regulators "continue to work closely" and share the same enforcement powers to tackle breaches of consumer protection law.
The CMA will now be writing to a number of airlines requiring information to understand more about their approaches to refunds for consumers prevented from flying by lockdown.
Following a careful analysis of this evidence, the CMA then will decide whether to launch enforcement action against individual airlines.
The CMA said it should not be assumed at this stage of the CMA’s investigation that any airline has breached consumers’ rights.
Rory Boland, Which? travel editor, said: "Airlines have often put customers in an impossible situation by operating flights during lockdown restrictions and refusing to offer cash refunds to people who cannot lawfully travel - so it is right that the CMA has stepped in to investigate and it should take strong action, where appropriate.
"We expect the hundreds of thousands of people who were simply following government rules by not taking flights to be issued refunds or given the option of a refund, as a result of this investigation."
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