Ryanair has settled with a second travel firm over a claim for refunds for the flight portion of package holidays cancelled during the Covid-19 pandemic.
Dnata-owned Travel Republic has received a settlement from Ryanair following the £2 million in refunds the airline was ordered to pay On the Beach in a High Court ruling at the end of October.
This confirmed the right of travel organisers to seek refunds from suppliers for cancellations under Regulation 29 of the Package Travel Regulations (PTRs).
The right had not previously been confirmed by a court, although the regulation states: “Where an organiser pays compensation [to a consumer, they] . . . may seek redress from any third parties which contributed to the event triggering compensation.”
More: On the Beach wins £2m in Ryanair refunds court case
On the Beach urges competition probe into budget airlines
Dnata Travel Group senior legal advisor Matt Vaggers referred to the High Court ruling when he spoke at an Abta Travel Regulations Conference in London last week. saying: “We’ve been involved in similar litigation which has now been settled.”
Vaggers declined to give details, with the settlement confidential, but said: “There is obviously something wrong if you need to spend huge amounts to recover funds from a supplier. The regulations provide for redress, but it needs to be clearer.”
He argued: “A package organiser can’t contract out of responsibility to consumers so suppliers should not be able to contract out of responsibility to package organisers.”
The ruling is binding on lower courts unless Ryanair wins an appeal. Industry lawyers suggested it opens the way to claims potentially worth millions.
Barrister Jack Harding of Deka Chambers, which acted for Ryanair, described the judgment as “profound”, arguing: “The High Court interpreted Regulation 29 as a free-standing right for the travel organiser to seek redress. I can’t say whether an appeal will happen, but if it survives an appeal it gives tour organisers a right to pursue recovery action against any service provider.
“It’s an entirely new provision that there is no guidance on. It remains to be seen how these claims will be quantified and under what law.”
Travel Weekly sought a comment from Ryanair, which has so far not indicated whether it will appeal.