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Coronavirus: UK airlines and travel firms accused of 'denying refunds'

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·5-min read
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Ryanair and EasyJet aircrafts parked at Southend airport, England. (Nick Ansell/PA via Getty)
Ryanair and EasyJet aircrafts parked at Southend airport, England. (Nick Ansell/PA via Getty)

All of the UK’s biggest airlines and most major travel firms are breaking the law by denying timely refunds to customers for flights and holidays cancelled during the coronavirus pandemic, consumer group Which? has found.

Which? revealed that 20 of the UK’s largest operators are withholding refunds that should legally be paid within 14 days.

Several companies are offering vouchers or credit notes instead but Which? is concerned that these “may prove to be worthless” if holiday firms collapse.

Customers have complained they have been unable to obtain refunds online or get through to make a claim on the phone.

Which? cited industry estimates that UK travellers are waiting for up to £7bn ($8.6bn) in coronavirus-related refunds.

The consumer group said none of the UK’s 10 largest airlines are refunding passengers according to the law.

Read more: Richard Branson warns of Virgin Atlantic collapse without government loan

Under the EU’s Denied Boarding Regulations, passengers are due a refund within seven days if a flight with an airline based in the UK or EU, or from an airport in the UK or EU, is cancelled.

On Monday Ryanair (RYA.L) started telling its customers that they will have to wait until “the COVID-19 emergency has passed” if they want a refund for a cancelled flight.

A Ryanair spokesperson told Yahoo Finance UK: “For any cancelled flight, Ryanair is giving customers all of the options set out under EU regulations, including refunds.”

EasyJet said: “We do aim to process claims in 28 days, however because of the increased volumes due to the pandemic, it means that unfortunately this could take longer.”

British Airways said: “If a customer's flight has been cancelled, they should call us to discuss their options. They can rebook, refund or choose to take a voucher to fly at a later date. Refunds can be requested at any point up to 12 months after the start date of the journey.”

None of the UK’s 10 biggest holiday companies, including Tui (TUI.L) and Jet2 (DTG.L), are offering full refunds within the legal 14 day time limit, and some are refusing to provide refunds altogether, according to Which?.

Read more: UK inflation slowed just before coronavirus lockdown took effect

A Tui UK spokesperson said: “We have now contacted all 170,000 customer bookings impacted by cancellations until 15 May. We recognise that our initial approach of calling all customers was taking too long, so we’ve introduced a refund credit system ⁠— which includes an additional 20% booking incentive ⁠— so customers can manage any changes online to save time.

“The refund credit is valid until 31 October 2021. We have a full FAQ on our website to help customers and have a large team of customers advisors working from home to help. Customers can also call us to request a full refund and we are working through these as quickly as possible.”

A Jet2 spokesperson said: “We are working tirelessly to proactively contact customers in departure date order to discuss their options, one of which is rebooking their holiday to a later date,” and highlighted that although they are continuing to operate a fully staffed call centre, the number of calls being received is “unprecedented.”

Which? said it had received thousands of complaints and requests for help from customers struggling to obtain refunds for cancelled trips.

In order to protect holidaymakers and help the industry Which? called for the legal processing deadline to be extended to 28 days, for any vouchers to be guaranteed against insolvency and eventually redeemable for cash, and for the government to offer a temporary travel guarantee fund to support firms unable to fulfil their legal obligations.

Read more: Startup working with NHS 'plans for the worst'

Rory Boland, editor of Which? Travel, said some travellers are thousands of pounds out of pocket and have “no idea if or when they’ll see their money again.”

He said: “We do not want to see the industry suffer further as a result of this outbreak, but it cannot be on consumers to prop up airlines and travel firms, especially when so many will be in difficult financial situations of their own.

“The government must urgently set out how it will support travel firms and airlines to ensure they can meet their legal obligations to refund customers for cancelled travel plans, and avoid permanent damage to trust and confidence in the travel industry.”

A spokesman for Airlines UK, which represents UK carriers, said its members are facing “a far longer than usual volume of refund claims to get through.”

Airlines UK said the coronavirus lockdown means firms are “not able to bring in additional staff to deal with them.”

Trade association ABTA has warned that the flood of claims caused by the coronavirus bringing the travel industry to a standstill means companies will collapse if they are forced to pay out immediate cash refunds.

ABTA is urging the government to allow companies to offer credit notes as a short-term alternative.

Read more: Admiral to refund £110m to car insurance customers

An ABTA spokeswoman said cash refunds “should be given as soon as possible” but warned that many travel firms are unable to provide immediate payments because they have not received money back from airlines and hotels.

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