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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 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

 

 

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Business Latest News

Boxing Day – Holiday or shopping day?

That tricky annual festive question is looming over us once more: should Boxing Day should be a national holiday for everyone or is it right that people working in retail should have to work?

#tescofail back to school sign over alcohol

This Boxing Day Asda, Marks & Spencer, Pets at Home, Poundland, Wickes and toy store The Entertainer will be closed. Tesco, Sainsbury’s and Morrisons will remain open.

Sainsbury’s will be open but with reduced opening hours on Boxing Day.

A Sainsbury’s spokesperson said: “Our colleagues do a fantastic job and have worked incredibly hard this year, so we’re doing everything we can to make sure they are able to take some time to rest and enjoy the festive season with their families, including reducing opening hours in supermarkets on Boxing Day.

“We’re recruiting more colleagues into our business than ever before so that we can give as many people as possible the time off they have asked for. This includes 12,000 temporary colleagues to support us this Christmas. For colleagues that have requested it, we have made sure they are able to take at least two consecutive days off over Christmas.

“In recognition of the outstanding service given to customers every day throughout the pandemic by our colleagues, this year we made two thank you payments to frontline workers.”

Tesco will be giving all frontline staff a 10% bonus for working that day and Morrisons will be giving double pay to all staff who work on Boxing Day.

Unions have asked retail outlets to close on Boxing Day as a “thank you” to staff. For example, GMB national officer, Roger Jenkins, said: “It’s a shame this is not extra holiday – workers will have to book a day of their annual leave entitlement.

“But it’s a step in the right direction and GMB now calls on the rest of the retail sector to follow suit and repay these key workers with a chance to spend Boxing Day with their loved ones.”

Supermarkets have seen record sales highs and many staff have been faced with horrendous abuse from the public. However, I believe that staff would rather have a bonus as a “thank you” than having Boxing Day off. After all, many wouldn’t be working Boxing Day anyway, so not working that day would make no difference.

Calling for all retail to close on Boxing Day is ridiculous. Some retailers, such as food outlets, have done well through the pandemic but many other retailers have gone to the wall! These range from small businesses to large, well-established names. To expect these stores to close when they have struggled all year is pretty thoughtless!

Closing these stores for another day could also cause other problems. We are seeing people not wearing masks and not adhering to social distancing guidelines in town centres. Closing stores could push more people to the stores which are open, causing crowding, and again in the stores when they reopen.

The answer is simple: Ask staff if they are willing to work Boxing Day and pay them extra if they do.

And give a bonus to all front line staff to ensure that all are thanked not just those working Boxing Day!