CAA warns Virgin Atlantic to cut long delays on refunds

The Civil Aviation Authority (CAA) review of airlines’ handling of refunds for cancellations due to Covid has highlighted failings by Virgin Atlantic, Ryanair, Tui and 24 other carriers.

The CAA reported on the refunds performance of 30 carriers today and said only three were “doing a good job of refunding passengers in a reasonable time and making it relatively easy”.

However, consumer publication Which? hit out at the CAA, accusing it of “failing consumers”.

Airline passengers are legally entitled to a refund for a cancelled flight within seven days.

The CAA found Virgin Atlantic’s processing of refunds had gone from taking up to 60 days early in the crisis to 120 days.

Ryanair had been taking 10 weeks or more to process refund requests and Tui had chosen “to automatically issue a credit note for the value of the flight, indicating the passenger would have to wait 28 days from receiving the credit note before they could claim a cash refund which would then take a further 28 days” to process”.

The CAA identified only Jet2, American Airlines and United Airlines as “consistently processing cash refunds quickly and having only a small backlog of refund requests”.

Of the other 27 carriers reviewed, which included British Airways and easyJet, the CAA found “a number had not been offering cash refunds and had only offered the choice of a voucher or to re-book a flight at a later date”.

The CAA said: “Those airlines have now changed their practice and agreed to offer passengers cash refunds.”

It identified “a number of issues regarding transparency where airlines did not provide clear information about the option of a cash refund or provide information about how to request a refund”.

But the biggest problem was “large backlogs of refund claims and very long waiting times to process a refund”.

The CAA said: “We have required airlines provide commitments to clear the backlog and reduce the waiting time for processing refunds”.

The regulator reported Virgin Atlantic has pledged to reduce the waiting time for refunds to 80 days in August, 60 days in September and 30 days by October.

But the CAA warned: “We will be monitoring Virgin’s performance particularly closely and will consider the use of formal enforcement powers if necessary.”

It reported Ryanair had committed to clear 90% of its backlog by the end of July and Tui is now “automatically commencing the cash refund process once it notifies passengers of the cancellation”.

The CAA also reported: “Airlines have made changes to their cancellation notifications and websites to ensure the process is now much clearer and more straightforward.”

However, Which? Travel editor Rory Boland claimed: “The regulator is failing the consumers it is supposed to protect.

“The reality is people are still owed millions of pounds in refunds and continue to be fobbed off by a number of airlines who have been brazenly breaking the law for months.”

Boland suggested: “These airlines will feel they can continue to behave terribly having faced no penalty or sanction.”

He added: “It is obvious the CAA does not have the right tools to take effective action against airlines that show disregard towards passengers and the law. More worryingly, it’s not clear the regulator has the appetite to use them.

“The government must use this opportunity to bring in much-needed reforms, including giving regulators greater powers to take swift and meaningful action.”

The CAA review examined the refund policies and performance of UK airlines along with “three of the largest international operators to the UK” and other international airlines identified by “the level of consumer feedback and concerns that refunds were not being paid”.

It concluded the service and performance from most airlines “has improved, leading to refunds now being paid out faster” and reported all had now made “commitments to improve performance” without the need for formal enforcement action.

However, the CAA announced a widening of the review to other international airlines and warned: “Consumers’ right to a refund must be protected.

“We will not hesitate to take further action against any airlines where necessary.”

CAA chief executive Richard Moriarty 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.

“We have taken into account the serious operational challenges many airlines have faced, [but] we have been clear that customers cannot be let down and airlines must pay refunds as soon as possible.

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

Summary statements for each airline are available here.

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