UPDATE 1-UK competition regulator to investigate airlines over refunds failure

(Adds detail, background)

LONDON, Dec 16 (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)