MPs call for airlines to provide full automatic refunds or compensation for flight disruptions, cancellations

By A Staff Reporter

LONDON April 25: In a report published today (25th April), UK Aviation: Reform For Take-Off, the Commons committee recommends that the UK Civil Aviation Authority (CAA) should be given “more teeth” to enable the regulator to slap fines on airlines that do not completely refund customers when required to do so by law.

The report also calls for the industry regulator to be handed new powers to fine airlines which fail to pay compensation quickly for cancelled or delayed flights.

The 55-page document also calls for ministers to publish an aviation recovery plan by June “as a priority” and for an airline insolvency bill to be introduced in the next session of parliament to better protect consumers, employees and taxpayers.

It comes amid fears of disruption for holidaymakers this summer as some carriers struggle to ramp up operations to meet surging demand following the pandemic.

The report warns that the Civil Aviation Authority (CAA) ‘urgently requires’ the power to immediately fine airlines that allegedly breach consumer law by not paying compensation within the legal time frame. As it stands, legal cases against carriers can take years before reaching the courts.

It also calls on ministers to introduce a system forcing airlines to pay ‘automatic compensation, eliminating the need for customers manually to apply for a refund.’

Ministers are set to beef up the CAA’s powers after a three-month consultation.

The Report sets out positive actions the Government can take to shape the recovery and development of the UK aviation sector after the pandemic.

International Travel Restrictions

The way in which the Government introduced international travel restrictions during the pandemic was inconsistent, confusing industry and passengers.

The aviation industry, which connects the UK to the world, experienced severe economic difficulties due to Government restrictions that were not based on scientific consensus.

As international travel restarted in the summer of 2021, the industry, its workforce and passengers were subjected to a traffic light system that was opaque, ambiguous and inconsistent.

Government restrictions on international travel throughout the pandemic were disproportionate to the risks to public health.

The Government must build international travel into its future pandemic resilience planning, developing a transparent and predictable system that can be used to facilitate safe international travel during potential future health crises.

Any restrictions on international travel must be proportionate and comparable to those in place across the rest of the UK economy.

Where the Government imposes future coronavirus restrictions on the international travel industry, and where such restrictions do not apply on a comparable basis to the domestic economy, the Government must compensate the industry for the economic loss suffered.

Consumer Rights
The Government must introduce an Airline Insolvency Bill in the next Session of Parliament to set out a framework to handle future airline insolvencies to protect the interests of consumers, employees and taxpayers.

The Civil Aviation Authority urgently requires the power to impose financial penalties on airlines that do not provide complete refunds to consumers when they are required to do so by law.

The Government must introduce a mechanism to ensure that when entitled to a refund by law, airline passengers are granted automatic compensation, eliminating the need for customers manually to apply for a refund.

Domestic Air Connectivity
Implementing more flexible rules on the provision of Public Service Obligation routes can improve connectivity between the four nations of the UK.

To improve domestic air connectivity, we agree with the Union Connectivity Review’s recommendations that the Government must revise subsidy rules to allow: multiple airlines to operate individual PSO routes, fostering a competitive market for regional services; and central Government to fund PSO routes between and within the UK’s four nations. We also recommend that central Government agree which routes should be funded and how much funding should be allocated to those routes in consultation with the devolved Administrations.

The Government’s changes to Air Passenger Duty are welcome. However, that system will not be introduced until 1 April 2023. The Government should bring that date forward to 1 July 2022 to support domestic routes that might otherwise collapse because of the coronavirus pandemic.

Sustainable Aviation
The delivery of the airspace modernisation strategy cannot be subject to further delay. Urgent attention is required if the strategy’s target deadlines are to be met.

The Government must review how the Civil Aviation Authority’s powers can be reformed to enable the regulator to enforce environmental mandates that the Government may introduce for the aviation sector.

The Government must introduce a market mechanism to support investment in sustainable aviation technologies and fuels.

Market Recovery
The Government must include a review of the slot allocation system in its strategy for the recovery of the UK aviation sector. The strategy must consider alternatives to the existing slots framework to encourage new entrants, capitalising on the opportunity to shape the system following the country’s departure from the EU.

The Civil Aviation Authority must factor in the premise that Heathrow is one of the most expensive global airports when making its decision on the price control. Ensuring that the airport’s charging is set at a fair range can create a competitive edge for Heathrow, making it more attractive for airlines to operate out of compared with other European hub airports.

The UK aviation sector’s recovery from the pandemic is still in its early stages. The Civil Aviation Authority’s price control proposals, due to be implemented in summer 2022, must be postponed by one year to allow the collection of further data on the aviation sector recovery.

To help airports and airlines manage the sudden increase in demand for aviation, the Government should prioritise the timely processing of checks for applicants for positions at airports; allow applicants for airport positions to start supervised classroom training, when their initial security checks are complete; review whether the number of trainees compared with supervising security officers can be increased from the current 3:1 ratio; instruct HM Revenue & Customs to provide applicants with personal statements to enable applicants to cover any gaps in their tax and employment status caused by their employers going out of business due to coronavirus; and ensure that Border Force uses all the means at its disposal to minimise queues at airports, including deploying onsite engineers to maintain e-gates in real time and allowing under-12s to use e-gates.