But will the UK’s airline regulator now regulate the sector properly?
The new Chairman of the Civil Aviation Authority (CAA), Sir Stephen Hillier, starts his role tomorrow, 1 August 2020. He begins his new job amid a crisis in the aviation sector and at a time when the regulator is failing to regulate airlines that are knowingly and deliberately breaking the law.
Notably, as a former RAF officer, the new chairman has zero experience in customer-facing environments, zero experience in the commercial aviation sector and no background in consumer law.
Yesterday the Civil Aviation Authority (CAA) released its review into airline refund practices during the Covid-19 pandemic, including a list of 18 airlines that it investigated.
Only three – United Airlines, Jet2 and American Airlines – were found to be consistently processing cash refunds quickly, as required by law and having only a small backlog of refund requests. Under Regulation EC261/2004 airlines must refund in full the cost of cancelled flights within 7 days.
I am unsurprised by the CAA’s report and I am highly critical of the regulator’s efforts.
As part of the announcement of his appointment on the CAA website on 7 May 2020 Sir Stephen said “I am delighted to have been given the opportunity to help lead the Civil Aviation Authority through the enormous challenges which lie ahead: maintaining our excellent safety record and promoting the UK’s world-leading aviation sector, while dealing with the consequences of COVID-19 and guiding us through our departure from EASA.”
However, that statement makes no mention of airline passengers. It seems clear that the CAA is still favouring the airlines, rather than their long-suffering passengers, when it comes to enforcing prompt refunds for cancelled flights.
The CAA has a track record of being slow and ineffective. One only has to look at previous research, such as Civil Aviation Authority launches review of airlines’ allocated seating policies in 2018, where no action whatsoever has been taken on the findings.
In April 2020 the CAA was told about airlines issuing Refund Credit Notes instead of cash and when asked what action it was taking to address the problem, a CAA spokesperson simply said “If an airline cancels a flight they are legally obliged to refund the customer.”
Numerous requests for details on any regulatory action the CAA would take, and if vouchers would be covered if the airline goes into administration, went unanswered. At the time an ABTA spokesperson said: “We continue to stress in our discussions with the CAA, as the relevant enforcement body, that airlines are obliged to refund under Regulation 261 and under IATA regulations for IATA members.” Eventually, on the 18 July the CAA announced that the RCN would be ATOL covered if consumers chose to take one.
Virgin Atlantic is still breaking the law
The CAA review refers to many of the airlines making hardly any improvement during this time. For example, the notorious Virgin Atlantic, one of 14 airlines not processing refunds within an appropriate time frame:
“Virgin Atlantic has committed to reducing the maximum time taken to process a refund and it expects to process all claims made in August within 80 days, all claims made in September within 60 days and all claims made in October within 30 days.”
This is still illegal, yet the CAA is still not imposing any sanctions on Virgin Atlantic.
By contrast, Jet2, American Airlines and United Airlines have been consistently processing cash refunds quickly and with only a small backlog of refund requests.
CMA steps in where the CAA fears to tread
In stark contrast with the CAA, the Competition and Market Authority (CMA) took action in relation to two holiday companies that were not providing refunds promptly. As early as 5 March 2020 the CMA had initiated a taskforce to monitor businesses during the Coronavirus pandemic.
On 30 April the CMA announced that it would look at 3 areas of concern: Wedding venues, holiday accommodation and nursery and childcare providers. By 9 June the CMA it had taken action to ensure that Vacation Rentals, the firm which operates the Hoseasons and Cottages.com brands, changed their coronavirus refunds policy to comply with consumer law and give cash refunds.
Concluding comment from the Complaining Cow
The CAA needs to do more and up its game.
Whilst most consumers will understand that airlines may not be able to refund within 7 days, they should not still be taking 30, 60 and 80 days.
Three airlines in particular have put the others to shame and are paying refunds promptly. This shows that what consumers are demanding is possible.
The CAA needs to ensure that the airlines are not furloughing staff who could be working to process refunds. I’d like to see the new CAA Chairman take a much stronger lead and ensure that airlines are fully complying with consumer law, without exception. Those that do not should have their operating licences revoked.
He needs to take firm and decisive action now.
If you would like to contact the Chairman of the CAA you can:
Email the CAA Chairman. This will also give you the contact details for other key CAA personnel.
For help with getting refunds see: