Ryanair and British Airways could have breached consumer law by refusing to refund customers at the height of the pandemic, according to the Competition and Markets Authority.
The watchdog said on Wednesday it had opened enforcement cases into both airlines, and had written to them detailing its concerns. British Airways is owned by International Consolidated Airlines Group.
It acknowledged that only a court could ultimately rule if consumer law had been broken. But it added: “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.”
The move follows an investigation by the CMA, launched in December, into reports that consumers were being denied refunds for flights they could not legally take when lockdown measures were in force. Instead, Ryanair provided an option to rebook, while British Airways offered vouchers or rebooking.
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.”
Resolving the CMA’s concerns could include “refunds or other redress for affected customers”, the watchdog said.
Ryanair said: “Ryanair has approached such refund requests on a case-by-case basis and has paid refunds in justified cases. 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.”
BA said it had acted lawfully “at all times”, adding: “During this unprecedented crisis we have issued well over 3m refunds.
“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.”
Russ Mould, investment director at AJ Bell, said: “It should come as a surprise to no-one that Ryanair and British Airways are still being dragged over the coals over the way they tried to squirm out of refunding customers who couldn’t fly during the pandemic. Their actions did them no favours at the time.
“They’re still operating under severe restrictions, so the natural response from the airlines would be to criticise the CMA, implying it is kicking an industry which is already on its knees. Aside from potentially losing business in the future from irate travellers, the worst-case scenario might be compensation for some affected customers.
“The airlines would kick and scream but ultimately they would pay and move on.”
