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‘British Airways cannot be forced to refund flights you missed during lockdown’ – Government

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The Competition & Markets Authority (CMA) announced this morning that it is dropping its attempts to force British Airways and Ryanair to refund passengers who could not take their flights due to UK lockdowns.

It accepts that there are no legal grounds to justify this in cases where the flight did operate.

You can see the official press release on gov.uk here.

Competition and Markets Authority British Airways Ryanair

In June, with much fanfare, the CMA announced that it was launching an investigation into airlines which had refused to refund customers who could not take flights due to legal restrictions.

(For clarity, this is NOT related to airlines who have failed to refund customers whose flights were cancelled. This investigation looked purely at people who did not travel but whose flights were operating.)

It was focussed on British Airways, who instead chose to offer vouchers to customers, and Ryanair, which only offered the opportunity to rebook.

In conclusion:

“After a thorough examination of relevant law, and the evidence it had gathered during its investigation, the CMA has concluded that the law does not provide passengers with a sufficiently clear right to a refund in these unusual circumstances to justify continuing with the case.”

British Airways Competition Markets Authority

Personally, the whole case seemed wrong from the beginning.

  • The original investigation appeared to be nothing more than a PR exercise by the CMA to be seen to be responding to consumer pressure
  • It would have taken no more than a couple of days to get a firm legal opinion on what British Airways and Ryanair had done. After all, the airlines had performed their contractual duty – ie operated the flight on which you bought a ticket.
  • British Airways, in particular, should arguably have been given credit – not threatended with legal action – for offering vouchers to customers. It was still operating flights and would have been perfectly within its rights to offer nothing. Instead, it offered vouchers which are virtually as good as cash to most people, given that they are valid until September 2023 and are transferable.
  • The CMA ignores the role of travel insurance, which should be the fallback position for anyone who could not travel due to lockdown

The CMA concludes:

“given the CMA can only enforce the law as it stands, it has decided to close the investigation.”

I can’t helping thinking that, given everything that has been going on in the business world over the last 18 months, the CMA could have used its limited resources more efficiently.

You can read more about the decision on gov.uk here.

Comments (68)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Harry T says:

    Agree with the decision and your analysis.

  • Igloo says:

    They probably spent the first 6 months having meetings where nothing happened or was decided.

    Eventually some bright spark suggests they get counsels opinion- a further 3 months of meetings would ensue deciding if it is a good idea, which counsel to hire and what the instructions should be.

    Instructions finally get out to counsel, and because they get paid a pittance for this kind of work they take a couple months to provide the advice that basically says no legal basis. CMA don’t like this, so spend another 4 months getting more advice from different counsel saying the same thing.

    Finally give up, spend the next couple of months figuring out how to dress this particular turd. Lots of approvals from senior people needed.

    18 months gone in a flash!

  • DR says:

    It’s a shame that the same common sense wasn’t used for other industries, such as childcare providers, who were also open and operating throughout lockdown(s), but which some people were unable to access due to legal restrictions. They were all forced to provide refunds. The CMA seem to apply very different logic for small businesses that have much less power to argue with them.

    • Andrew says:

      With childcare providers it wasn’t so much about forcing them to provide refunds but about stopping them continuing to charge for servces that the majority of families were no longer able to take advantage of.

      No one would have defended BA if they’d have forced you to pay the balance on a flight both them and you knew you were not able to take under threat of refusing to do business with again if you didn’t. Losing any already paid money is one thing (still wrong in my opinion) but forcing you to give them even more money is both morally and legally questionable at best.

      • DR says:

        I have to disagree. the CMA clearly stated that any money already paid to childcare providers should be refunded. “Consumers should be offered a refund for childcare services paid in advance which are then not provided by the business because of those restrictions”.

        I am not suggesting that charging for future childcare provision (or services provided by other industries) during lockdown would have been right or wrong. I was just highlighting the inequality between the way the CMA has applied its logic to small and large businesses during lockdowns, specifically regarding refunds.

        • Rob says:

          Were these facilities open though?

          Regus, for example, ensured that all its buildings were unlocked each day so it could keep billing tenants even though they were unable to attend. No-one is challenging that although the bad publicity was huge. Some people ended up putting their business into receivership as a technicality purely to stop paying Regus.

          • DR says:

            Yes, most childcare businesses were open and providing services to anyone able to leave home to attend them under the lockdown restrictions, such as ‘key workers’.

        • Anna says:

          Ditto with hotels and other accommodation, which I’ve posted about further down.

  • Andrew says:

    Does frustration of contract not apply? If it’s literally againt the law to take a booked flight it seems like it should. The airline may have performed their contractual duty by operating the flight but passengers were prevented from fulfilling their part by events utterly outside of their control.

    • Rob says:

      It wasn’t against the law to fly. It was illegal to leave home.

      • Andrew says:

        And that distinction’s worth making why? Ultimately a passenger would have been breaking the law by leaving home, travelling to the airport and boarding the flight. And that’s before you consider that, had you made it to the airport, BA would have likely turned you away since most destinations weren’t letting foreigners in.

        Whichever way you look at it fulfilling the contract would have required multiple breaks of law and hence it was impossible to fulfill.

        • Phil W says:

          It’s worth making because some people did have legitimate grounds to leave their home and fly. the airlines therefore operated flights. the fact some individuals booked a flight and subsequently found out they were unable to take the flight is not the problem of the airline, it is the individuals issue.

          • Rob says:

            Assume you were arrested and put on bail. You are legally unable to leave the U.K. Should an airline refund your booked flight?

        • Rob says:

          If BA had turned you away you would have been refunded.

          Nothing stopped you booking a couple of house viewings abroad and going on holiday.

          • Ken says:

            If you are on bail / prison and can’t travel then the doctrine of “you are the author of your own misfortune “ would apply.

            In addition, insurance usually negates frustration claims.

      • Ken says:

        That could still be frustration of contract though.

    • Dan says:

      I agree. The flight may have operated but pressure from authorities in the destination meant that BA could not allow you to board the flight!

    • pauldb says:

      But aren’t the contractual obligations in fact: Customer – pay, Airline – fly. Covid didn’t frustrate the customer’s ability to pay.

      • Andrew says:

        Customer – pay
        Airline – fly customer

        The airline may have flown but it was no longer possible for them to fly the customer

        • Rob says:

          Airline – to operate the service on which you have booked and to accept you for travel on it

          • Andrew says:

            You could also argue that it’s a contractual obligation that the customer present themselves for travel at the appropriate time (difficult to argue against since BA insist you be at the airport by a certain time or they cancel your ticket). The customer is no longer able to perform that part of the contract due to exceptional, unforeseen circumstances hence the contract is frustrated.

        • Aaron C says:

          What if the customer broke their leg the day before they were due to fly and were subsequently unable to travel? In those circumstances it’s nobody’s fault (say the customer had an accident) but you wouldn’t expect the airline to refund them I don’t think?

          • Andrew says:

            But accidents happen. They’re not completely unexpected. People break limbs or become ill all the time. Two years ago no one would have foreseen that it would be literally illegal to leave your house with the intention of going to Paris for the weekend.

            Frustration of contract isn’t about ‘fairness’. To say it applied here probably would be ‘unfair’ on airlines assuming they operated the flight and offered vouchers in lieu of refunds. Performing the contract would have necessitated the passenger breaking the law and I very much doubt any UK contract can require such action.

  • Terri says:

    As noted in the Guardian, in 1902 a Mr Henry sued a hotel who refused to refund his money for a room on the parade route when the coronation of Edward VII was cancelled. The hotel relied on the room still being available despite the cancellation of the coronation. The hotel lost the argument.

    Remains up to individuals whether they want to test through the courts whether the law of frustration applies to covid19 when it becomes illegal for UK citizens to travel on flights that are running.

    • Terri says:

      From memory “for non essential reasons” such as a holiday travel persons were not allowed to leave their home.

    • Phil W says:

      It wasn’t illegal to fly. It was illegal to leave your home, except in certain circumstances. In those circumstances you were permitted to fly.

    • Rob says:

      Clearly the Henry case is not seen as definitive though or – for example – you could book a flight to Qatar now for the World Cup and then demand a refund if England don’t qualify.

      • Ken says:

        That wouldn’t be frustration of contract though would it?

        • Rob says:

          Neither is booking a hotel to watch a coronation which is later postponed.

          However …. perhaps Mr Henry booked a ‘coronation package’ which promised, for eg, use of the hotel roof to watch the procession? In that case he would have had a claim.

          • ken says:

            The ruling was that it was an implied term of the contract.

          • Rob says:

            You would need to see the advertising from the hotel which persuaded Mr Henry to book for that to be the case (which it may well have been). Clearly in itself it isn’t a breach of contract.

          • ken says:

            It wasn’t a hotel it was 2 day rental of a flat on Pall Mall, and as with much famous case law there is a wikipedia entry.

            https://en.wikipedia.org/wiki/Krell_v_Henry

            Contrast with flights to World Cup in Qatar.
            Clearly there would be no implicit “England qualify” term.

            £75 is equivalent of £9500 today

  • Andrw says:

    If the CMA had formally published that it not being legal to leave your home wasn’t a good enough reason for individuals not to travel back in April 2020, I wonder how that would have impacted the level of travel over the last 18 months.

  • Sammyj says:

    Resources would be better used against the agencies who refused to give refunds for flights which were cancelled by airlines, or retained fees from the amounts they did give.

  • Oh! Matron! says:

    Happy with this judgement: I was due to fly to Kamchatka last year with Aeroflot. Despite the flights continuing to fly (I’m not due another coffee until 2pm, apols), I was not permitted to enter Russia. That’s not Aeroflot’s fault. They still offered vouchers, though, which is above and beyond their contractual obligations

    • Andrew says:

      “I was not permitted to enter Russia. That’s not Aeroflot’s fault”

      It wasn’t your fault either though. We’re not talking about a visa being refused on a technicality. Before March last year nobody would have foreseen a blanket ban on travel. IANAL but ‘frustration of contract’ basically says that were a contract can no longer be fulfilled due to circumstances outside of either party’s control the contract is null and void (ie the passenger should be refunded).

      It’s not a case of the airline’s “contractual obligations”, it’s a case of the contract no longer existing at all.

      • John says:

        Does Russian law have the concept of frustration of contract?

        • CH says:

          Frustration is very much inherent to Russian law (albeit not necessarily in the common law sense)!

      • Rui N. says:

        Still, it’s certainly not the airline fault that the “contract can no longer be fulfilled”. Why should they then be the one losing money on this? Maybe someone should take the government to court and ask for reimbursement of these flights?

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