The UK competition regulator is investigating whether British Airways and Ryanair broke consumer law by failing to offer customers refunds for flights they could not legally take because of coronavirus restrictions.
The Competition and Markets Authority (CMA) said that during periods of lockdown, when non-essential travel was unlawful for people in one or more parts of the UK, the two airlines refused to give refunds to customers, instead offering vouchers or the opportunity to rebook.
The regulator said it was concerned that both firms might have breached consumer law and unfairly left customers out of pocket when they failed to offer people their money back.
The CMA’s investigation only concerns flights that were not cancelled, when it says British Airways offered people vouchers or rebooking, while Ryanair provided the option to rebook.
Ryanair told the CMA that it had repaid a small number of people after looking into their specific cases.
The CMA has opened enforcement cases into both airlines and has written to them detailing its concerns.
The move comes after the CMA opened an investigation into the airline sector in December 2020 after reports that consumers were being denied refunds for flights they were not legally able to take.
As part of its investigation, the CMA is looking to resolve customers’ concerns with companies, which may include seeking refunds or another kind of redress.
Andrea Coscelli, the 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 CMA does not have the power to levy fines on companies but can work with companies to seek redress for customers, and can also take firms to court.
Ryanair said it had approached refund requests “on a case-by-case basis” and had paid refunds in “justified cases”.
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.”
A spokesperson for BA said the airline had issued well over 3m refunds during the pandemic and criticised government policies and travel regulations, adding: “We continue to offer highly flexible booking policies at the same time as operating a vastly reduced schedule due to government-imposed travel restrictions, and we have acted lawfully at all times.
“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.”
An investigation by the CMA earlier in the pandemic into holiday accommodation led to several firms changing their refund policies, after they had initially refused to refund customers whose stays were cancelled during the lockdown in spring 2020 and had offered them vouchers instead.