The Civil Aviation Authority says it will consider action against airlines if they fail to refund customers for flights cancelled as a result of the coronavirus.
The regulator has also backed the issuing of vouchers – as long as customers are also given the option of a cash refund as well.
Airlines are obliged to refund customers within seven days, but have been struggling to process refunds with the majority of flights suspended as a result of the pandemic.
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Carriers keeping hold of the cash is also preventing tour operators and travel agents from refunding their customers.
“We are reviewing how airlines are handling refunds during the coronavirus pandemic, and will consider if any action should be taken to ensure that consumer rights are protected,” the regulator’s communications director Richard Stephenson said.
“Under the law, consumers are entitled to receive a refund for their cancelled flights, despite the challenges the industry is currently facing.
“We support airlines offering consumers vouchers and rebooking alternatives where it makes sense for the consumer.
“But it is important that consumers are given a clear option to request a cash refund without unnecessary barriers.
“We expect airlines to provide refunds for cancelled flights as soon as practically possible, whilst appreciating there are operational challenges for airlines in the current circumstances.”
Simon Cooper, chief executive of On the Beach, told the Daily Telegraph that it was “super important” that the CAA had begun holding airlines to account.
Unlocking the money from airlines would allow thousands of smaller travel firms to reimburse customers.
“There is very definitely a pyramid here,” he said. “ At the top of the travel pyramid are the airlines.”
“Unless the money comes from the top, it cannot flow back to consumers.”
Consumer group Which? said more needs to be done to hold airlines to account.
Travel editor Rory Boland said: “While the CAA is right to remind airlines of their legal obligations to refund passengers for cancelled flights, incidents of carriers openly breaking the law are mounting up and people are being left thousands of pounds out of pocket as a result.
“Customers of many airlines are being told to either accept a voucher or wait months for their money to be returned to them. Asking airlines to issue refunds ‘as soon as practically possible’ does nothing to remedy this, and risks giving too much leeway to those airlines which have a legal obligation to refund within seven days.
“The regulator must stand up for passengers’ rights and come down strongly on airlines that are systematically denying refunds for cancelled flights, and the government must urgently intervene with support for the industry, so carriers can comply with the law and refund consumers without fear of going bust.”
This story was updated on May 11 to clarify that the CAA statement endorsed the use by airlines of vouchers and rebooking options if a refund was also available and did not refer to Refund Credit Notes recommended by Abta in relation to package bookings.
