In this Blog piece, Monica looks at the recent developments in a high profile CMA investigation into practices by various airlines…
Like me, you may remember where you were on 9 June 2021 as your heart skipped a beat reading the press release from the Competition and Markets Authority (CMA) announcing that it had launched investigations into British Airways and Ryanair. In truth, you probably do not! However, you may have come across the recent news that said investigations have now been dropped.
Let’s take a walk down memory lane and remind ourselves how we got here.
What was it all about?
During the last 18 months, both British Airways and Ryanair have been accused of refusing to offer cash refunds to some consumers who were unable to travel because of Covid-19 lockdown restrictions. As you can imagine, many consumers complained and the CMA listened and decided to commence an investigation into the actions of the two carriers.
The conundrum
Whilst many airlines generally accept that consumers are due cash refunds if airlines cancelled the relevant flights, there is less certainty about whether they would be due such cash refunds if the flight was to go ahead but the consumer was unable to take it because they were legally prohibited (for example, by lockdown restrictions) from doing so. There are arguments on either side, but the law is far from clear, and it is precisely this issue that the CMA attempted to explore.
The outcome of the CMA investigations
After deploying many hours, instructing ‘experts’, and spending public money investigating the issues, the CMA effectively concluded that pursing the carriers would be too lengthy and too expensive. It confirmed that, having reviewed all applicable law, on balance, any further pursuit of the two carriers was not justified for three reasons:
- There is a lack of clarity in law on the issue; and
- The lack of clarity means that the CMA could not be certain that it would succeed if the cases were taken further;
- Given points 1 and 2 above, the CMA could not justify further expenditure of public funds to pursue the two carriers.
The CMA noted that it can only apply the law as it stands and as such, rather than taking a stab in the relative dark, it would rather focus its efforts on seeking clarification of the law in order to improve certainty for future cases.
Conclusion
Given that we have spent more the last 19 months analysing Force Majeure clauses (which, admit it, many once thought of as boilerplate) and advising on Covid-19 cancellation rights, the outcome of the CMA’s investigations all seem rather anticlimactic. Whilst this is great news for the carriers, if you are like me you may feel a little frustrated that we will not get to see how the court would have approached this case and as such, we may have missed an opportunity for great legal insight!
On the other hand, it does confirm what many travel providers have been saying for the last 19 months. The law needs to be clear, and the Package Travel Regulations need to be reviewed so that they are suitable for both consumers and the industry, as well as standing up to scrutiny. It will be interesting to see how long it takes for change to take effect given that consultation (assuming the CMA will seek industry consensus) and legislative change take a long time.
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This article was originally published on: 18 October 2021
