Categories
ADR Ombudsman Business Latest News Transport

CMA steps in where the CAA fears to tread

CMA investigates and takes enforcement action

The Civil Aviation Authority (CAA) should be the regulator for air transport in the UK. However, it is increasingly clear that the Competition and Markets Authority (CMA) is doing the CAA’s job for them.

During the course of this year the CMA has taken action against a number of companies which were not giving full refunds where they were owed due to coronavirus cancellations.

This includes: Sykes Cottages and Vacation Rentals in June, Bijou Weddings Group in September and yesterday (15 December) the announcement that following CMA action, LoveHolidays had committed to pay out over £18 million to customers waiting for money back after their holidays were cancelled due to coronavirus.

CAA: A regulator that fails to regulate

In July the CAA reported on its airline refunds review. A number of airlines were found to be hugely failing in their legal duties and they gave commitments to the CAA to resolve the matters. For example, on 3 July, Ryanair published a set of commitments on its website about timescales for processing cash refunds. Ryanair confirmed that 90% of its backlog would be cleared by the end of July 2020 with all refund claims made in April to be processed by 15 July and most of the claims made in May to be refunded by the end of July. This statement has not been updated and just a quick glance on Twitter and in Facebook groups dedicated to Ryanair complaints shows that Ryanair customers are still waiting for refunds.Ryanair aeroplane in sky

Commenting on the review, Richard Moriarty, CAA Chief Executive said: “The airlines we have reviewed have responded by significantly enhancing their performance, reducing their backlogs, and improving their processing speeds in the interests of consumers.

“There is still work to do. We have required commitments from airlines as they continue the job of paying customer refunds. Should any airline fall short of the commitments they have made, we will not hesitate to take any further action where required.”

However, the CAA has failed to take any further action, appearing to believe that no further action is required.

CAA defers but the CMA brings action

It would appear that the CMA disagrees. Today, 16 December, the CMA announced that it was investigating whether airlines have breached consumers’ legal rights by failing to offer cash refunds for flights they could not lawfully take.

The CMA says “The investigation will consider situations where airlines continued to operate flights despite people being unable lawfully to travel for non-essential purposes in the UK or abroad, for example during the second lockdown in England in November.”

The CMA is aware that, in some cases where flights were not cancelled, customers were not offered refunds, even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher.

The CMA says that it will be working closely with the UK Civil Aviation Authority as it progresses its investigation.  Its press release continues:

“While the Civil Aviation Authority (CAA) leads on consumer protection in the airline sector, the CMA has undertaken extensive action in connection with cancellations and refunds during the pandemic and is well placed to support the CAA on these issues. The CMA and the CAA continue to work closely and share the same enforcement powers to tackle breaches of consumer protection law.

The CMA will now be writing to a number of airlines requiring information to understand more about their approaches to refunds for consumers prevented from flying by lockdown.

Following a careful analysis of this evidence, the CMA then will decide whether to launch enforcement action against individual airlines.”

It is quite clear that the CMA has had to step in and walk where the CAA fails to tread.

Paul Smith, Group Director of Consumers and Markets at the CAA, said :

“It is right that consumer rights are upheld throughout this period and we welcome this investigation from the CMA, which follows our review into airline refunds earlier this year. The CMA has been leading on a broad range of issues arising during the coronavirus pandemic and we will continue to work closely with the CMA in support of this investigation.”

This defensive stance from the CAA makes the regulator appear ridiculous. As the CMA states, it has the same enforcement powers as the CAA. But the CAA has done nothing to enforce anything since their review earlier this year. Airlines continue to flout the law and the CAA appears to have done nothing to ensure that airlines have kept to their June commitments.

No other regulatory body needs another organisation to step in to support their enforcement work. The other regulators, such as Ofgem (Energy), Ofcom (Telecoms) or the Office of Rail and Road (Transport) are able to enforce the law themselves.

So, why does the CAA need help? Because it is ineffective and unwilling to take on the airlines face to face. Has CMA simply had enough of watching this farce unfold?

Hopefully this action by the CMA will shame the CAA into taking further action by itself.

It is the job of the Civil Aviation Authority to investigate airlines but it has continued to take no action. The CAA has told me in the past

“Should any airline fall short of the commitments they have made, we will not hesitate to take any further action where required.”

However, time and time again it has not done so. The CAA has shown itself to be not fit for purpose. Instead it is finding in favour of airlines and continuing to allow them to behave illegally. The CAA has shown itself to be not fit for purpose. The CAA needs to use its enforcement powers to revoke airline operating licenses where airlines do not comply with the law.

Aeroplane in sky with clouds

Further information:

A new Chairman started at the CAA on 1 August 2020. But unfortunately the new chair, Sir Stephen Hillier, has been ineffective in tackling airlines that are continuing to break the law on consumer refunds.

CAA launches consultation and tells no-one… launched a consultation on Alternative Dispute Resolution (ADR) but didn’t tell any stakeholders, as Which? calls for a single Ombudsman in the sector.

More Ombudsman Omnishambles report which looked at approval and monitoring of ADR schemes and followed Ombudsman Omnishambles which looks at the failings of regulatory bodies, including the CAA.

Ryanair tops CAA refund complaints

Getting help for Coronavirus cancellation claims and shopping help and advice for getting refunds and redress

 

 

Categories
ADR Ombudsman Business Latest News Press releases

Ryanair tops CAA refund complaints

Press release

Low-cost airline is highest in regulator’s complaints figures

Ryanair is the most complained about airline by far, according to figures recently released by the Civil Aviation Authority (CAA).

A Freedom of Information Request reveals that more than half of all the 1280 complaints received by the Civil Aviation Authority (CAA) regarding refunds due to COVID-19 related cancellations were about Ryanair. The CAA received 642 complaints about Ryanair. The second most complained about airline, Air Transat, was not even close, with a total of only 120 complaints. [1]

The CAA has collated the information on 74 airlines. recording how many passengers have complained about cancellation refunds during the COVID-19 pandemic period.

In its FOI response the CAA said that “Should any airline fall short of the commitments they have made, we will not hesitate to take any further action where required.” However, in its review into airline refund practices during the COVID-19 pandemic, Ryanair was one of the airlines identified by the CAA as not processing refund requests sufficiently quickly. The CAA found that the airline had a sizeable backlog of refund requests and that refunds were taking 10 weeks or longer.

Ryanair aeroplane in sky

Ryanair’s broken promise

On 3 July, Ryanair published a set of commitments on its website about timescales for processing cash refunds. Ryanair confirmed that 90% of its backlog would be cleared by the end of July with all refund claims made in April to be processed by 15 July and most of the claims made in May by the end of July. Their website now states that more than 90% were processed by the end of July but there is no update nearly 3 months on and customers are still waiting for refunds today:

 

So, what action is the CAA taking against Ryanair, a company that is flagrantly breaking the law on refunds of cancelled flights?  It is not doing anything…

Passengers take matters further

Passengers who fail to get their refunds are bypassing the tortuously long delays that Ryanair appears to to be imposing on them. Marcus Williamson, editor of the consumer information website CEOemail.com, says “Ryanair customers who email the CEO are having success in getting their refunds processed, but some have had to threaten legal action before getting a positive result.”

Clearly Ryanair knows it is breaking the law by not making these refunds in a timely manner and makes the refund when threatened with legal action by its customers. Ironically, by threatening legal action, Ryanair’s own customers are achieving far more than the CAA is doing in trying to get the company to respect the law!

Ryanair was asked to comment but refused to do so.

CAA fails again

This is the latest in a series of failures by the CAA. Less than two weeks ago Helen Dewdney – The Complaining Cow a consumer champion – exposed the CAA for launching a consultation on Alternative Dispute Resolution without telling stakeholders, covering it on social media or any press release. The exposé prompted the regulator to reopen the consultation for a further 6 weeks.[2]

If a consumer is unable to resolve their complaint with their airline, they can escalate it to an Alternative Dispute Resolution (ADR) body or, if their airline is not a member of an ADR scheme, through the CAA. Ryanair is no longer a member of an ADR scheme. However, the CAA has done little to address the problems regarding ADR[3]  or Ryanair’s illegal behaviour.

In December 2018 the CAA stated that it was taking enforcement action against Ryanair for the company’s failure to pay compensation to passengers when the airline staff took strike action. Nearly two years on there has been no update about what action the CAA will take.

New CAA Chairman but passengers still losing out

A new Chairman started at the CAA on 1 August 2020.[4] But unfortunately the new chair, Sir Stephen Hillier, has been ineffective in tackling airlines that are continuing to break the law on consumer refunds.

Dewdney says that she is not surprised by the latest findings:

“The Competition and Markets Authority has taken enforcement action against companies that are breaking the law, such as holiday companies. It continues to keep the public informed with guidance and has used its regulatory powers to tale enforcement action.

In contrast, the CAA has similar powers but has shown itself to be not fit for purpose. Over and over again, it is finding in favour of airlines and letting them behave illegally. The CAA needs to use its enforcement powers to revoke airline operating licenses where airlines do not comply with the law.”

Notes to Editors

[1] FOI airline complaints response and spreadsheet to Helen Dewdney’s request available on request

[2] CAA launches consultation and tells no-one… https://www.thecomplainingcow.co.uk/caa-launches-consultation-and-tells-no-one/

[3] See Ombudsman Omnishambles and the More Ombudsman Omnishambles reports which looked at approval and monitoring of ADR schemes.

[4] See details of the appointment   https://www.thecomplainingcow.co.uk/civil-aviation-authority-caa-gets-new-chairman/