Airlines’ Potential Consumer Law Breach Speaks to Overall Consumer Finance Issues

Blog | Asset Finance
Published: 15th October 2021
Area: Litigation & Dispute Resolution

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On 19th June this year, the CMA made it known that it was investigating whether airlines British Airways and Ryanair had in fact breached consumer laws, by refusing to offer refunds to passengers who couldn’t travel due to lockdown laws.

Now, the CMA has announced the closure of this investigation.

What were the findings?

The CMA’s findings concluded that the law “does not provide passengers with a sufficiently clear right to a refund in the particular circumstances relating to COVID-19 restrictions.” The legal position appears to be that passengers are entitled to refunds in the event that the airline cannot provide its services as contractually obligated. What is still unclear, is whether passengers deserve refunds if the flight still goes ahead, but temporary legislation (such as the lockdown regulations) prevents passengers from taking the flight altogether.

What did these airlines do?

The findings suggest that British Airways and Ryanair refused to refund passengers who were unable to fly due to lockdown rules.

  • British Airways offered vouchers or rebooking;

  • Ryanair offered rebooking only.

Even though these actions suggest that both airlines may have flouted consumer law to some degree, the CMA’s findings have concluded that they did not, even though some passengers were left out of pocket for a period.

Why did the CMA close the investigation?

The CMA decided that it could not continue the investigation due to timescales and the uncertainty of the legal position. This decision was made after they took expert advice on the matter.

Consumer rights in this case were not as obvious as some commentators thought, so this is an area that the travel industry, its regulators and government may need to look at. That said, COVID-19 was an unprecedented event and forcing all operators to make such refunds may have had a catastrophic effect.

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