The call from consumer champion Which? comes as the UK marks 20 years without a regulatory fine or financial penalty being issued to airlines.
The relative weakness of the UK’s enforcement mechanisms was exposed earlier this month, Which? said, when the US fined British Airways $1.1 million for complaints about unpaid refunds during the pandemic.
The US Transportation Department said it had received 1,200 complaints about BA from passengers regarding delays receiving refunds during the pandemic.
According to Which?, the CAA was given the ability to apply to the courts for enforcement orders against airlines in June 2003 but it has since used this power just once against a major airline in 2018.
In that case, Ryanair escaped punishment following a three-year court battle after it agreed to pay passengers compensation they were owed for flights cancelled during a strike by pilots.
Research by the consumer champion previously found approximately 2.3 million people in the UK were left out of pocket for flights they could not take during the pandemic.
Rocio Concha, Which? director of policy and advocacy, said: "The US government fining Britain’s flag carrier when our own authorities are powerless to do the same makes a mockery of aviation regulation in the UK, which has been failing travellers for 20 years.
"The government must act without delay and legislate to grant the CAA the powers it needs to issue hefty fines, and hold airlines to account when they break the law. Until it does so, UK travellers’ rights will be worth no more than the paper they are written on."
