Air­lines face coro­n­avirus crack­down over re­funds

Watch­dog draws up list of worst cul­prits as mil­lions of cus­tomers left out of pocket due to can­cel­la­tions

The Daily Telegraph - Business - - Front Page - By Oliver Gill and Hasan Chowd­hury

AIR­LINE reg­u­la­tors are ex­pected to this week launch a crack­down on car­ri­ers which have failed to re­fund fam­i­lies for flights can­celled due to coro­n­avirus, as the in­dus­try reels from new re­stric­tions over Spain.

The Civil Aviation Au­thor­ity is un­der­stood to have drawn up a list of the worst cul­prits, with mil­lions of cus­tomers still owed bil­lions of pounds af­ter be­ing told they could not fly.

En­force­ment ac­tion could end up with air­lines be­ing banned from op­er­at­ing in the UK.

An an­nounce­ment has been pen­cilled in over the com­ing days, although this timetable may slip as the watch­dog grap­ples with the im­pact of a fresh two-week quar­an­tine for ar­rivals from Span­ish air­ports.

Air­lines’ fail­ure to hand out re­funds has sparked fury from pas­sen­gers who have been forced to axe hol­i­days. The CAA has now whit­tled down the list of firms fac­ing ac­tion to a hand­ful of car­ri­ers. It re­mains un­clear which com­pa­nies could be sub­ject to a sanc­tion.

Tui, Vir­gin At­lantic, Ryanair and easyJet are among a slew of house­hold names to have faced crit­i­cism for drag­ging their heels on re­fund­ing cus­tomers. Many would-be hol­i­day­mak­ers have been wait­ing months to get their money back, de­spite rules which say re­funds for flights should be handed out within a week of a can­cel­la­tion.

De­mands for a re­fund are ex­pected to spike again in com­ing weeks as air­lines are forced to re­con­sider their sum­mer hol­i­day sched­ules amid fears over a sec­ond wave of Covid abroad. Tui has al­ready can­celled all hol­i­days on the Span­ish main­land up to Aug 9.

In a bid to avoid huge pay­outs as the pan­demic struck, many travel firms made it eas­ier for hol­i­day­mak­ers to re­ceive a credit note or voucher than a re­fund – al­low­ing them to hold on to vi­tal cash to prop up their fi­nances.

The pan­demic grounded all but a hand­ful of flights and ex­posed a de­struc­tive flaw in the fi­nances of the travel in­dus­try. Many car­ri­ers are de­pen­dent on pay­ments for flights not due to take off for weeks, months or even years to prop up their cash re­serves and use this money to fund op­er­a­tions now.

In­dus­try in­sid­ers said that strip­ping air­lines of their op­er­at­ing li­cence was only a worst-case sce­nario and the process could take years to com­plete.

One of the most high-pro­file ex­am­ples of the CAA tak­ing en­force­ment ac­tion in re­cent years was its bat­tle with Ryanair, which re­fused to com­pen­sate pas­sen­gers for flights can­celled by strikes over the sum­mer of 2018.

A spokesman for easyJet said the firm is cur­rently pro­cess­ing re­funds for cus­tomers in less than 30 days and has in­creased its call cen­tre staff to deal with de­mand. He added: “We have en­gaged with the CAA through­out the pan­demic and we do not ex­pect any en­force­ment ac­tion from them.”

A spokesman for Vir­gin At­lantic said: “We would re­as­sure all cus­tomers that if they’ve re­quested a re­fund for a can­celled trip, it will be re­paid in full, and the work to process re­funds is our pri­or­ity. In or­der to ac­cel­er­ate the process, we have boosted the size of the teams han­dling re­funds and trained ad­di­tional staff to use the re­quired sys­tems, which is in­creas­ing our ca­pac­ity to process re­funds.”

The CAA, Tui and Ryanair did not re­spond to re­quests for com­ment.

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