MEPs call for tougher rules on refunds and airline insolvency Business News

The transport select committee has called for tougher action against airlines that are slow to reimburse – and better protection for passengers when carriers go bankrupt.

In his latest report, British aviation: reform for take-offMPs on the committee called on the Civil Aviation Authority (CAA) to ‘use its existing powers to challenge businesses and pursue enforcement orders from the courts to tackle breaches of consumers’ refund rights’ .

During the coronavirus pandemic, several thousand passengers whose flights were canceled or unable to travel due to government restrictions reported long delays in getting their money back.

As a longer-term measure, the Transport Select Committee is asking passengers to get automatic refunds when they are due – usually when a flight is cancelled.

The report says: “The government must introduce a mechanism to ensure that where entitled to a refund under the law, airline passengers receive automatic compensation, eliminating the need for customers to manually request reimbursement.”

The CAA has openly stated that its power to impose refunds “is insufficient to allow prompt redress for non-compliance by air operators”.

Responding to the new report, consumer director Paul Smith said: ‘We have consistently called for stronger enforcement powers for consumers, including the ability to fine airlines.

“This would allow us to act more quickly where necessary and align our powers with those of other sector regulators.”

MEPs said proposed legislation on airline insolvency should be brought forward as a matter of urgency. The government’s December 2019 Queen’s Speech included a proposal to legislate, following the collapse of Thomas Cook and its airline three months earlier.

After tens of millions of pounds of taxpayers’ money was spent on a rescue airlift, the legislation proposes “a special administration scheme for airlines to meet the needs of passengers after insolvency and to keep the fleet of aircraft airborne long enough for passengers to be repatriated.” .

The report also calls for the CAA’s regulatory powers to be strengthened to “enhance its oversight of distressed airlines” and mitigate the effects of a future airline failure.