UPDATE 1-UK scraps action against Ryanair, British Airways over refunds

(Adds BA comment)

LONDON, Oct 7 (Reuters) - Britain's competition regulator
has scrapped its action against Ryanair and British
Airways over their failure to offer refunds to passengers
prevented from flying by COVID-19 restrictions, saying the legal
position was unclear.

During pandemic lockdowns, instead of offering refunds to
those legally unable to fly, IAG-owned British Airways
offered vouchers or rebooking and Ryanair providing the option
to rebook.

The Competition and Markets Authority (CMA) started action
against the airlines in June, saying passengers who were legally
unable to take flights booked in good faith should have their
money back.

But it said on Thursday the law did not provide passengers
with a sufficiently clear right to a refund in such unusual
circumstances.

Chief Executive Andrea Coscelli said the CMA "strongly
believed" the passengers should be offered a full refund.

"However, after considering the relevant law and gathering
evidence in our investigation, we have concluded that the length
of time that would be required to take this case through the
courts, and the uncertain outcome, can no longer justify the
further expense of public money," he said.

He added the CMA hoped the law would be clarified.

Ryanair said it welcomed the decision. "We operated a
limited schedule during UK lockdowns for customers who travelled
for essential reasons," a spokesperson said.

"Passengers had the option to change their bookings without
paying the flight change fee, and many availed of this option."

British Airways said in a statement it had acted lawfully at
all times during the crisis, issuing nearly 4 million refunds
and offering highly flexible booking policies.

"We're grateful for (our customers') support at a time when
we've been navigating dynamic and fast-changing travel
restrictions to maintain a limited schedule," it said.
(Reporting by Paul Sandle and Alistair Smout)