UK regulator to probe airlines over Covid refund refusals

Britain’s competition watchdog said it would investigating whether airlines broke the law by refusing refunds on flights passengers could not take due to the coronavirus pandemic.

The Competition and Markets Authority (CMA) on Wednesday said it had opened the case after reports passengers had not received refunds despite the imposition of travel bans.

Airlines and holiday companies have been attacked for withholding cash that should have legally been returned to customers or for delaying refund payments.

The CMA said it had evidence that flights were not cancelled during UK travel bans and, as a result, some customers were only offered the option to rebook or receive a voucher rather than get a full cash refund.

“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,” CMA chief executive Andrea Coscelli said.

“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.”

Desperate to stem the flow of cash as fleets were grounded and passenger numbers plummeted, airlines were accused of using customer cash to bolster their balance sheets.

Carriers such as easyJet and British Airways-owner IAG have since raised funds from equity raisings and new debt commitments.

The CMA said it would write to airlines asking for information on the issue before deciding whether to launch enforcement action against individual companies. It did not disclose the identity of any airlines it was investigating at this stage.

Consumer group Which? last month estimated that Britons were still waiting for around £1bn in holiday refunds.

In recent weeks, the CMA has ordered booking sites LoveHolidays and Lastminute.com to pay out millions to consumers for refunded bookings.

It launched the action after receiving hundreds of complaints from customers. Similar commitments have been secured from providers such as Virgin Holidays, TUI UK, Sykes Cottages and Vacation Rentals.