Campaign Business Media Brand of the Year 2020
Travel Media Awards Trade Publication of the Year 2020 - Print & Online
CAA launches review of airline refund practices
The CAA has launched a review into the refund practices of airlines during the coronavirus crisis, with chief Richard Moriarty calling for stronger enforcement powers to police the sector.
Appearing before the government’s transport committee on Wednesday (20 May), Moriarty was asked to explain what powers the the CAA has to compel travel companies and airlines to repay people for holidays and flights that have been cancelled.
He told the committee the authority’s powers under the Enterprise Act took the form of a two-year court process, which he believes could be sped up. "I would submit that there is a case to strengthen them and enhance them," he said.
"We have a track record of standing up for consumers and taking airlines to court. But this process takes two years; it’s for government and parliamentarians to balance the powers they give regulators to balance the public interest with the companies we would seek to use them against.
"I would submit that if using them takes two years and requires a very expensive court process, perhaps we’ve got the balance in the wrong place."
Moriarty revealed the CAA had launched what he described as a probe or review of airline refunds, and said the authority had published clear guidance that refunds should be paid "as soon as practicable".
"We are supportive of things like vouchers and rebooking where it suits the consumer," said Moriarty. "But where the consumer demands a cash refund, it is their right and they must get one.
"The question is how quickly the airlines can pay that money back to consumers, and tour operators, given the operational challenges they face, particularly around staffing during lockdown.
"All of the airlines we regulate have said to us they are paying refunds, and they will continue to do so until they reduce their backlogs."
Moriarty explained the situation varied from airline to airline. He said one "large airline" had already cleared 90% of its refund backlog, while another smaller carrier had only managed a third and was having to bring in extra resources.
"Part of our probe is to understand [whether] they are doing everything possible to get money back as soon as possible to the consumer," Moriarty added, stressing that it was important to recognise businesses had been hit by complications arising from the country’s coronavirus lockdown such as self-isolation and staff not being able to access their offices.
"Having said all of that, as the lockdown eases, we would expect them to adapt and clear those backlogs as soon as possible," said Moriarty.
Aviation minister Kelly Tolhurst told the committee the Department for Transport had been making the CAA’s directions clear to airlines, and said the department would take a "pragmatic view" on enforcement, recognising the challenges airlines were facing and various legislative shortcomings
"The reality is [that] a lot of this EU regulation wasn’t designed for the significant challenges that are being faced by some of these companies," said Tolhurst. "The regulations are being tested, but ultimately, customers are entitled to their refund. We are working with the CAA in order to make sure we understand where there are particular issues.
"The point Richard makes around opportunities for the future where we can strengthen enforcement, I think that’s something we need to look at as we move out of this crisis – and absolutely look at ways [to] take action if there are examples of organisations completely ignoring the rules as they stand."
MP Simon Jupp asked Tolhurst whether she felt the CAA’s review could be sped up, to which she replied there was unprecedented demand for refunds presenting significant operational challenges for airlines.
"Ultimately, we need to get to a position where people are able to get their refunds on time," she said. "I’ve raised it, [and] the industry’s raised it with me [through] their asks for us as a government to make changes to the vouchers. We will continue to monitor it."
James Chapple
Latest issue
Recommended For You
Competitions
Our Next Events
TTG Digital Destinations Festival
TTG Luxury Virtual Luxpo
