UK competition regulator to investigate airlines over refunds failure

LONDON (Reuters) - Britain's competition regulator said on Wednesday it would investigate whether airlines had breached consumers' legal rights by failing to offer cash refunds for flights they could not legally take during a COVID-19 lockdown.

The regulator, the Competition and Markets Authority, said the new inquiry was part of its ongoing work in relation to holiday refunds during the pandemic.

COVID-19 has forced the cancellation of thousands of flights. Consumer groups have accused the airlines of being slow to issue refunds and misleading passengers into accepting flight vouchers instead of cash, flouting rules.

Airline finances have been choked by COVID-19, with restrictions suppressing travel since March. EasyJet and British Airways-owner IAG have had to ask shareholders for new funds and take on new debt to survive.

But the CMA said that despite the strain airlines were under they had a responsibility to treat consumers fairly and abide by their legal obligations.

The extra probe announced on Wednesday is looking at England's second lockdown in November, when people were banned from travelling. Despite this some airlines did not cancel flights or offer refunds to those who had booked.

The CMA said it was working with the aviation regulator, the CAA, on the issue.

In its statement, the CMA noted that only a court could decide whether any airline had breached consumers' rights.

(Reporting by Sarah Young, editing by Estelle Shirbon and Kate Holton)