The competition regulator has dropped its investigation into whether British Airways and Ryanair broke the law by failing to offer refunds to customers who could not legally take their flights because of coronavirus restrictions – but said the airlines should have given them their money back.
The Competition and Markets Authority (CMA) said it was scrapping its four-month investigation because of a “lack of clarity in the law [which] makes it insufficiently certain that it would be able to secure refunds for customers”.
During periods of lockdown, when non-essential travel was banned in parts of the UK, the two airlines refused to give refunds to customers. Instead British Airways, which is owned by IAG, offered vouchers or rebooking, while Ryanair offered travellers only the option to rebook.
The CMA launched the investigation into BA and Ryanair in June, citing concerns that failing to offer refunds might have breached consumer law.
However, the regulator said on Thursday the protracted time a court battle would take, coupled with the uncertainty of winning, meant it could no longer justify the expense of pursuing the case.
“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,” said Andrea Coscelli, the chief executive of the CMA.
“However, 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 through the courts, and the uncertain outcome, can no longer justify the further expense of public money.”
The CMA added that given the importance of the failure to refund consumers who had “unfairly lost out” it hoped consumer law in this area would be clarified.
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Which? was scathing in its assessment of the airlines’ behaviour and said the CMA should be given greater powers, including the ability to fine airlines.
Rory Boland, the travel editor at the consumer watchdog, said: “It’s hugely unfair that passengers have been left to shoulder the bill for following the law and protecting public health by staying at home.
“Meanwhile British Airways and Ryanair have been allowed to hold on to their cash for flights people could not legally take. The government must urgently set out how it plans to review travel regulations and strengthen consumer protections. Consumers are being let down.”
British Airways said it had acted lawfully at all times during the pandemic, issuing nearly 4m refunds and offering “highly flexible booking policies enabling millions of our customers to change their travel dates or destinations”.
Ryanair welcomed the decision to end the investigation, pointing out that “passengers had the option to change their bookings without paying the flight change fee, and many availed of this option”.
The CMA originally launched an investigation into the wider airline sector in December 2020, after reports that consumers were being denied refunds for flights they were not legally able to take.