BA and Ryanair: Customer Refunds

Baroness Randerson Excerpts

Tuesday 15th June 2021 Lords Chamber

Asked by

[Baroness Randerson]

To ask Her Majesty’s Government what discussions they have had with representatives of the international travel industry about the impact of the action being taken by the Competition and Markets Authority against BA and Ryanair regarding refunds for customers.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, the investigation by the Competition and Markets Authority into British Airways and Ryanair is ongoing. It would be inappropriate for the Government to comment on an ongoing investigation by an independent regulator, but we have been clear that the rights of consumers and the obligations of businesses remain unchanged. It should not be unduly difficult for customers to receive a refund when they are entitled to it.

[Baroness Randerson (LD)]

One struggles to think of another product where customers pay such a high price so far in advance of receiving a service. Yet some airlines have, as the Minister has indicated, avoided making refunds when they could not deliver that service. This has left not only passengers out of pocket but has had a disastrous impact on travel agents who often have to refund their customers without receiving the fare money back from the airlines. Have the Government investigated any of the proposals from Which? that passengers who have paid in advance for their flights should have their payments held safely in trust and disbursed to airlines at the time of the flight? Does the Minister agree that a resolution to this problem is long overdue and that the actions of a small number of airlines are damaging the industry as a whole?

[Baroness Vere of Norbiton (Con)]

The Government are taking a keen interest in this issue, but it should be noted that refund issues between airlines and travel agents are a contractual matter between those two businesses. The Civil Aviation Authority does not have a role in enforcing such contracts. On the action we are taking on behalf of consumers, the CAA has reviewed airlines’ compliance on refunds. The authority did this last summer and it has since worked collaboratively with airlines to improve their performance. I am pleased to say that most airlines are now paying refunds within seven days.