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(Alliance News) - There is no refund certainty for customers who were not able to travel on flights booked with International Consolidated Airlines Group SA's British Airways and Ryanair Holdings PLC, an investigation by the UK competition watchdog found Thursday.
The UK Competition & Markets Authority blamed a "lack of legal clarity" in the law and said it has now closed an investigation into refunds from the two airlines.
A probe was launched in June over concerns the airlines may have broken the law by failing to offer refunds for flights that customers could not legally take off during lockdown. Instead, IAG's British Airways offered customers vouchers or rebooking, and Ryanair provided the option to rebook.
"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," the CMA said.
Consumer protection law sets out that passengers are entitled to refunds when an airline cancels a flight, because the firm cannot provide its contracted services. However, it does not clearly cover whether people should be refunded when their flight goes ahead but they are legally prohibited from taking it.
The case is different in the package holiday sector, the UK regulator explained, where customers are protected by a separate set of laws which give them refund rights.
Following its review of evidence and the law, the CMA said that prolonging the probe could not be justified given the length of time it would take to reach an outcome and the uncertain result.
"We strongly believe people who are legally prevented from taking flights due to lockdown laws should be offered a full refund, and we launched this investigation in the hope that we would be able to secure a positive outcome for consumers," commented CMA Chief Executive Andrea Coscelli.
"Given the importance of this to many passengers who have unfairly lost out, we hope that the law in this area will be clarified."
Shares in IAG were 0.3% higher in London on Thursday morning at 180.78 pence each, while Ryanair was up 1.0% at EUR17.12.
By Will Paige; willpaige@alliancenews.com
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