Airlines ‘should be fined’ for cancelled holidays and delayed refunds as Rishi Sunak urged to ‘show support’

Holiday companies have sent a joint letter to the Prime Minister demanding airlines should be fined if they fail to pay refunds for cancelled flights.

The firms called on Rishi Sunak to "take immediate and definitive action" on behalf of thousands of holidaymakers who have been subjected to "unfair treatment".

Many holiday providers cancelled flights and package deals this summer due to issues such as the wildfires which ravaged Rhodes and other Greek islands and strikes.

If a service is disrupted, airlines are supposed to re-route passengers even on a rival airline or in some cases refunds are given if a flight is cancelled.

The Department for Transport recently recommended that the Civil Aviation Authority (CAA), which regulates airlines in the UK, should be given stronger enforcement powers including the power to fine airlines that fail in their duties.

But the letter to Prime Minister Rishi Sunak urges him to lay out a clear timetable for when that might happen.

Currently, the CAA has no power to directly fine airlines but instead it can apply to the courts for an enforcement order to force the airline to comply with laws around delays and redress.

If an airline refuses, the court process can potentially end in an airline paying a fine.

The joint letter was sent by companies including loveholidays, On the Beach, Riviera Travel and Thomas Cook, alongside consumer organisation Which? and travel business organisations the Association of Independent Tour Operators and Advantage Travel Partnership.

They want Sunak to use the King’s Speech in November to introduce a Bill which would boost the CAA’s powers.

In the letter, it said the firms urge Sunak to “show support for British holidaymakers affected by this summer’s air travel disruption by agreeing to strengthen the CAA’s enforcement powers.”

It added that the firms acknowledged that some of these issues were outside of airlines’ control but airlines “are routinely failing what’s in their control: to uphold their customers’ legal rights to rerouting and refunds, and provide clear and timely passenger information."

Which? said the CAA has “failed to act” as authorities in the United States and Europe have been “much tougher in their defence of consumer rights.”

The watchdog said the US Transportation Department recently hit British Airways with a $1.1 million fine after it failed to pay timely refunds in 2020.

While in 2021 Italian regulators fined Ryanair €4.2 million and easyJet €2.8 million for failure to pay prompt refunds during the pandemic.

Which? said in 2020 it received more than 14,000 complaints in just under six weeks from passengers saying they were struggling to get refunds for cancelled flights.

The watchdog added that it passed this evidence to the CAA, but it only requested a commitment from airlines that they would begin to refund passengers in line with the law - no enforcement action was taken.

CAA joint-interim chief executive Paul Smith said: “We have long called for a stronger enforcement toolkit to bring us in line with other UK regulators.

“The plans recently announced by the government would achieve this and help ensure that the UK Civil Aviation Authority is better equipped to hold the industry to account in meeting their obligations to passengers.”

The government declined to comment further on the Department for Transport’s recommendations following the letter to Sunak.