CMA’s Ryanair investigation ‘won’t be last in travel industry’

Senior industry figures believe the Competition and Markets Authority’s (CMA) investigation into Ryanair for a potential breach of pricing rules will not be the last in travel.

Alan Bowen, legal advisor to the Association of Atol Companies, suggested the CMA is also likely “to be looking at an OTA”.

He said most tour operators’ adverts “seem to be just about complying” with CMA pricing rules, which now require all charges, including taxes in destination, to be included in the ‘total price’ of a holiday offered for sale.

CMA consumer law director Jason Freeman confirmed last month the regulator is now “doing enforcement work” after issuing guidance last November.

Bowen said: “There is general recognition that companies have to comply, but it can be difficult.” 

However, a trade source described compliance as “not consistent” and said: “I’m not seeing mid-range tour operators changing their websites. We’ve done the work [to comply online] and it’s ready to go, but we won’t put it live until we see competitors doing it.”

The source added: “I don’t think [the CMA investigation of Ryanair] will change things [and general compliance] will likely come down to the first tour operator” facing enforcement action. 

The CMA is investigating Ryanair over “a potentially unfair” contract term that requires an adult travelling with a child to pay for a “mandatory family seat” to sit next to them, and whether it includes this fee in the total flight price.

The authority noted Ryanair’s terms “require parents to sit with their children and charges them about £8 per flight to do so”.

Lawyer Rhys Griffiths, partner at Fox Williams, noted “Ryanair maintains its policy ‘fully complies with all relevant laws’” and said: “This may run for some time. Ryanair has signalled it will fight and has been willing to defend its practices through litigation. If the CMA decides against Ryanair, I wouldn’t be surprised if that proved to be just the start.”

He added: “The stakes are significant. The CMA has powers to impose fines capped at 10% of global turnover and to order Ryanair to refund all affected customers.”

The CMA has until December to reach a decision.