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UK regulator probes whether airlines broke the law on COVID-19 refunds

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Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
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CAPTION OMITS INFO ON DUAL TAKE OFF Aircraft G-CIVY, one of the last two British Airways Boeing 747-400 aircraft takes off for its last flight departure from London's Heathrow Airport, Thursday, Oct. 8, 2020. The retirement of the fleet was brought forward as a result of the impact the Covid-19 pandemic had on the airline and the aviation sector. (Andrew Matthews/PA via AP)
One of the last two British Airways Boeing 747-400 aircraft takes off for its last flight departure from London's Heathrow Airport, Thursday, Oct. 8, 2020. Photo: Andrew Matthews/PA via AP

The UK’s competition watchdog has launched a probe into the airline industry, investigating whether airlines broke the law by refusing refunds on flights passengers could not take due to COVID-19.

The Competition and Markets Authority (CMA) on Wednesday said it had opened a case on the airline industry after reports that some passengers were not offered refunds despite travel bans.

The CMA said it had evidence that flights were not cancelled during UK travel bans and, as a result, some customers were only offered the option to rebook or receive a voucher rather than get a full cash refund.

READ MORE: More than £1bn in refunds 'illegally withheld' for cancelled holidays

“We will be carefully analysing all the evidence to see whether any airlines breached consumers’ legal rights by refusing people cash refunds for flights they could not lawfully take,” CMA chief executive Andrea Coscelli said.

“We recognise the continued pressure that businesses are currently facing, but they have a responsibility to treat consumers fairly and abide by their legal obligations.”

The CMA will write to airlines asking for information on the issue before deciding whether to launch enforcement action against individual companies. The CMA said it was not disclosing the identity of any airlines it was investigating at this stage, nor making a judgement on whether any had broken the law at this stage. The watchdog said it would work closely with the UK’s Civil Aviation Authority.

READ MORE: LoveHolidays to refund over £18m for cancelled trips

Travel refunds have been a major headache for consumers during the pandemic, with many would-be travellers complaining of long delays and difficulties getting their money back. Consumer group Which? last month estimated that Brits were still waiting for around £1bn in holiday refunds.

In recent weeks, the CMA has ordered booking sites LoveHolidays and Lastminute.com to pay out millions to consumers for refunded bookings. The watchdog said it launched the action after receiving hundreds of complaints from customers. Similar commitments have been secured from providers such as Virgin Holidays, TUI UK (TUI.L), Sykes Cottages and Vacation Rentals.

WATCH: Ticket holders still fighting for refunds to canceled and postponed events