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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. The company 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 Dean Dunham AviationADR CEDR

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.

How the CMA will work with the CAA

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.”

CMA forced to act on airlines failures

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.

CAA compared with other regulators

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.

Future for the CAA and ADR

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 AviationADR Dean Dunham, CEDR, CAA

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.

Report cover Dean Dunham, CDRL, CTSI, CAA, OA,

Crowds of people with report covering OA, CTSI, CA, CDRL, Dean Dunham & others

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.

How approval bodies are failing to properly approve and monitor Alternative Dispute Resolution -

Ryanair tops CAA refund complaints

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

 

 

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Latest News

Civil Aviation Authority (CAA) gets new Chairman

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.

CAA review

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.

aeroplane in the sky

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:

Travel in the time of Coronavirus – Your rights explained