UK Civil Aviation Authority update on airline refunds review

The UK Civil Aviation Authority is reviewing the refund policies of all UK airlines, as well as a number of international airlines that operate flights to and from the UK. The review began in May and is considering how airlines are handling refunds for flight-only bookings during the coronavirus pandemic.

We have published guidance and advice for both industry and consumers on this important issue throughout the COVID crisis. We support airlines offering vouchers and rebooking alternatives where it makes sense for the consumer, but we have reiterated to airlines that they must provide cash refunds to passengers who request this where a flight has been cancelled.

We do not expect airlines to systematically deny consumers their right to a refund, and our review is considering whether any further action needs to be taken to protect consumer rights.

Airline Performance

Of the eighteen airlines contacted, all have engaged with us on the issues that we have raised, and all have confirmed to us that they are now paying refunds. We have grouped airlines by performance in three categories:

1. Acceptable performance
2. Requiring transparency improvements
3. Requiring processing time improvements

Acceptable performance

Through our review we have identified a selection of airlines that are paying refunds quickly and that do not have a sizeable backlog of refund requests. While regulations state that refunds should be paid within seven days of the request, we understand that there are operational challenges that airlines are facing in the current circumstances that make this very challenging to meet.

We will continue to monitor the performance of these airlines, but as things stand we do not expect further work to be required unless there is a material change in performance.

Requiring transparency improvements

Our review has identified a second group that, based on passenger complaints, did not appear to be providing refunds at all. Having engaged with these airlines, the Civil Aviation Authority can now confirm that these airlines are all paying refunds.

A number of airlines have now introduced new systems for processing refunds. More work remains to be done by this group of airlines to make it clear to passengers that they are entitled to a refund and show that there is a straightforward process for claiming it.

We will allow these airlines a short period to make the necessary improvements before we reach a definitive view on their performance.

Requiring processing time improvements

Our review has identified a third group of airlines which have substantial backlogs of refund claims and which, in our view, are taking too long to process refunds.

This group includes some major carriers with large backlogs of refund requests extending to many months. The Civil Aviation Authority has asked these airlines to provide commitments that they will speed up refund processing timescales.

We have received responses from a number of airlines agreeing to this request. We will assess the suitability of these commitments and, should we accept them, we will monitor the airlines' performance against them. If performance does not improve in line with the commitments, the Civil Aviation Authority will not hesitate to take enforcement action.

Conclusion

This is the first update the Civil Aviation Authority has provided on its review of airline refund practices. We intend to publish a further, more detailed update later this month. Only a minority group of airlines have been consistently providing consumers with refunds in an acceptable timeframe, however we have noted a marked improvement across most airlines since our review commenced. We expect this direction of travel to be maintained.