Which? is calling for the introduction of a new mandatory aviation ombudsman, amid concerns that proposed changes to the broken airline complaints system fall far short of what is needed to restore consumer trust in travel.
The consumer champion has responded to the Civil Aviation Authority’s (CAA) consultation on potential changes to its current Alternative Dispute Resolution (ADR) policy, highlighting how the current rules do not work for consumers and risk further damaging trust in the travel sector.
Which? has repeatedly heard from passengers who have been let down by the convoluted dispute resolution process. Some have battled for over a year to receive compensation for their case, despite promises that cases would be resolved within 90 days. Others have had to rely on claims management firms, with one woman Which? spoke to having to hand over nearly half of the compensation she was entitled to as payment to her solicitors.
The CAA’s proposed changes to the internal rules for ADR schemes include a new process for “complex and novel” cases and a post-decision review process that could give airlines an opportunity to influence how future cases are handled.
Which? is concerned the proposed changes will do little to address the weaknesses of the existing system, and amount to little more than tinkering around the edges. The proposals also appear to prioritise airlines’ perspectives over consumers’, and risk already weak consumer protections being further diluted.
The current system makes it too easy for airlines to shirk their responsibilities to promptly refund or compensate consumers – even allowing them to quit dispute resolution schemes without penalty, as Ryanair did in 2018 – leaving thousands of passengers out of pocket.
It also involves unreasonably long waits for passengers as they go through a long and convoluted dispute process, which puts too many people off complaining at all.
Instead, Which? is calling for the government to introduce a new aviation ombudsman scheme that all airlines operating in the UK must be made to join to improve the passenger complaints process, as part of its upcoming aviation recovery plan.
The review of the broken complaints system comes as consumer trust in the sector continues to dwindle as a result of the coronavirus outbreak’s impact on the sector. According to the latest figures from Which?’s Consumer Insight tracker, trust in the travel industry is still worryingly low, with nearly a third (31%) of consumers saying they do not trust airlines and travel operators.
The majority of the largest airlines flying from the UK are currently signed up to one of two UK schemes, AviationADR or CEDR. While both have been authorised to handle escalated passenger complaints since 2016, neither is mandatory and airlines are free to leave the schemes at will.
After Ryanair was told to pay £2.6 million to passengers whose flights were cancelled by strikes in 2018, it simply quit the AviationADR scheme, potentially saving millions in unclaimed compensation.
Due to its limited enforcement powers, the CAA was unable to penalise Ryanair. The regulator took legal action in December 2018, but almost two years later there is still no sign of passengers getting the compensation they are owed.
Which? is also concerned that allowing airlines a choice between resolution schemes could enable them to game the system and switch between schemes based on which one they think will deliver more favourable outcomes, with concerns that ADR schemes might prioritise attracting new business over delivering for consumers.
Passengers are also let down by the current system as many are either put off using ADR schemes because of the long and complex process of doing so, or aren’t aware they may be able to use them to escalate their complaints. Instead, many choose to take court action themselves or rely on a claims management firm to fight their claim on their behalf.
Thousands of court proceedings are issued against airlines by claims management firms every year, with passengers having to pay a significant fee to their solicitor out of any compensation they win.
Which? member Premini Mahendra used a claims management firm to fight her case against Tui after her flight was delayed by 13 hours. The case took 12 months, and a bailiff was eventually required to collect the compensation. Premini was awarded €400, of which the solicitors took almost €180. She said “[Tui] just wanted to frustrate me and string out the process. Lots of people probably just give up.”
If the government’s aviation recovery plan – due this autumn – is to deliver for passengers, it should be published without delay, and must include clear plans to introduce a single, statutory-backed aviation ombudsman scheme that all airlines operating in the UK must be members of, in order to help restore consumer trust in the travel sector which has plummeted in recent months.
In the interim, the CAA must ensure it makes the existing ADR schemes work better for passengers. The regulator should step up scrutiny of existing ADR bodies, and ensure greater transparency for the complaints handling process. It must also improve its requirements for data reporting and encourage airlines to act on their complaints data.
Rory Boland, Editor of Which? Travel, said:
“Throughout the coronavirus crisis, passengers have seen their consumer rights ripped up by some airlines that have consistently flouted the law – but they have found there is nowhere to turn for support.
“This situation has only served to highlight that the current complaints system is broken, and tinkering around the edges will not be enough to reform it and make it work for passengers.
“The government must ensure that passengers’ needs are front and centre in its aviation recovery plan, starting with the introduction of a mandatory, single ombudsman scheme for airlines, as a first step to restoring trust in the sector.”
Notes to editors:
- Trust in the travel industry plummets to record low amid coronavirus refunds scandal
- Ryanair potentially saving millions in unclaimed compensation
- Latest Consumer Insight tracker figures on consumer trust in the travel industry: https://consumerinsight.which.co.uk/tracker/trust?search%5Bdate_from%5D=2008&search%5Bdate_to%5D=1907&search%5Bsort_by%5D=unsorted
Kasia Nieduzak told Which? Travel she made a complaint to Aviation ADR after her Ryanair flight was cancelled in September 2017. She received a ruling from the arbitrator in July 2018 and finally received her compensation in November 2018 – but only after a 14-month battle that involved around 170 phone calls and sending 45 emails.
She said: “It took me over a year to get my compensation and I only received it because I was extremely persistent and didn’t give up. I am very certain that many people whose flights were cancelled between September and October 2017 did not get their rightful compensation.”
Summary of proposed changes to current ADR rules:
- The creation of a new process for complaints that are genuinely complex and novel. This is a new exception to the standard complaint handling process that would sit alongside the existing exception for highly complex cases. The current timeframe of 90 days for resolving a complaint wouldn’t apply in this new process. It’s not clear what cases would count as complex and novel – according to the CAA, it could apply to those situations where the law needs testing. The CAA has set out a list of all the circumstances that wouldn’t be considered as complex and novel, which include claims under the EU 261/Denied Boarding Regulations.
- Introduction of a new rule allowing ADR schemes to establish processes whereby complaints are assessed on a flight basis rather than passenger basis. This process should ensure that different passengers complaining about the same flight for the same reasons receive the same outcome, while also creating efficiencies in the complaint handling process which should ultimately be beneficial for passengers.
- Introduction of a new rule enabling ADR schemes to set up trust accounts to hold funds on behalf of businesses for the purpose of paying compensation to passengers. This would be beneficial to consumers as it would reduce the number of transactions between the consumer, ADR scheme and the business in question. However, it also makes it important that ADR schemes can be trusted and that there is proper oversight of these fund arrangements.
- Introduction of a new post-decision review process allowing ADR schemes to review outcomes of cases to monitor and evaluate internal processes, which could lead to positive changes and improvements. This is not intended to overrule complaint decisions, as those rulings are binding. While this seems positive, Which? is concerned that the process isn’t transparent enough and lacks regulatory oversight, to ensure airlines aren’t given too much influence over reviews and future decisions through raising concerns or asking for changes in processes.
Which? calls for reforming ADR:
- Work on the recommendations set out in the Aviation Strategy and the review of ADR and complaint standards envisaged in the Passenger Charter;
- Establishing a single statutory ombudsman scheme, and for such a scheme to be mandatory for all airlines;
- Providing the CAA with enhanced enforcement powers including fining powers for breaches of Regulation 261/2004 allowing the regulator to hold businesses to account and punish for bad behaviour;
- For the CAA to use its existing powers more effectively within the limits imposed by the current ADR framework. Which? is calling on the CAA to:
- seek and promote greater transparency of ADR bodies’ complaint handling and decision-making processes and their engagement with the industry;
- routinely review ADR bodies’ approved status and monitor their performance to ensure they are accountable to consumers;
- improve and expand its requirements for data reporting and promote improvements by encouraging businesses to act on their complaints data.