Which? exposes flaws in government plan to weaken passenger rights and slash flight compensation payouts
Which? is warning the government against bowing to pressure from airlines to weaken passenger rights, amid some of the worst disruption seen at airports across the UK in years.
In recent weeks hundreds of flights have been cancelled and thousands of travellers have been affected by chaotic conditions as airlines and airports have struggled with staff shortages. Airlines have routinely trampled on passenger rights regarding rerouting and compensation, knowing they are unlikely to face action from an aviation regulator with limited powers to intervene when they brazenly break the rules.
The shameful scenes at UK airports have shown why passenger rights must be strengthened. But, incredibly, the Department of Transport is proposing to weaken them – including with a plan to slash compensation payouts when UK domestic flights are severely delayed or cancelled.
In an impact assessment, the government admitted the plan came after lobbying from low-cost airlines, which claimed compensation fees could amount to up to three per cent of their annual turnover. Shockingly, no evidence to back up these claims was produced.
Which? challenged seven airlines – BA, EasyJet, Jet2, Ryanair, TUI, Virgin Atlantic and Wizz Air – to provide information about flights potentially affected by compensation and the amounts they have paid out in recent years. However, none would reveal how much they pay out to passengers, with some citing commercial sensitivity. Meanwhile, in response to a freedom of information request by Which?, the Civil Aviation Authority (CAA) said it had “no information” on how much compensation airlines have paid out under EC261 rules in the last 10 years.
The EC261 compensation framework is an essential deterrent against unfair practices such as overbooking and denied boarding. Which? is concerned these practices could once again become more commonplace if the rules are overhauled. The new scheme would only offer refunds based on ticket price and the length of delay instead – similar to the Delay Repay system in rail.
Which? and travel industry representatives have written to Transport Secretary Grant Shapps, urging him to abandon the proposed reforms. The letter states: “We believe that it is imperative that consumers are offered the right protection that firstly ensures any disruption, inconveniences or losses they experience are minimised, and secondly, ensures that they are appropriately compensated when these do occur.
“The hollowing out or abandoning of the safeguards contained within the EC261 compensation regime would be a retrograde step, one that will lead to a further degradation in trust in airlines and hamper the recovery of the wider travel industry. We therefore urge you to urgently re-think these plans.”
The refusal from airlines to provide evidence to back up their compensation claims shows that the government lacks sufficient evidence to press ahead with sweeping changes to passenger compensation rights. Without the data Which? requested, it is impossible for the government, consumer groups or regulators to evaluate the current UK flight compensation regime or work on how to improve it.
The proposed new system would negatively impact passengers by significantly reducing the amount of compensation they can receive for severely delayed or cancelled flights. Which? research previously found the reforms could slash average payouts by £163 per passenger, while saving airlines tens of thousands for a single flight.
Which? is also concerned that, if adopted, this plan may set a precedent that could weaken passenger compensation rights worldwide.
While Which? backs any move – such as automatic compensation – that would make it easier for passengers to get the money they are legally entitled to for delays and cancellations, it must not come at the expense of weakened compensation rights elsewhere.
Which? is calling on the government to abandon its proposals and instead focus on strengthening passenger rights and the regulator’s enforcement powers in a market affected by persistent law-breaking by airlines over many years. The government and CAA must also ensure airlines are complying with their legal obligations.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“It is completely unacceptable for the government to rush through plans to weaken passenger rights. Airlines are hiding the truth about the impact of compensation payouts on their business, and the recent chaos at UK airports and disgraceful treatment of travellers by some airlines shows why passenger rights desperately need to be strengthened.
“The secretary of state has recently talked up the merits of a system of automatic compensation. While Which? backs any move that would make it easier for passengers to get the money they are legally owed for delays and cancellations, we are concerned it may be used to introduce a weaker system of redress by the back door.
“The government must drop its ill-conceived plans to slash compensation rates for domestic flights and restore confidence in travel by giving the CAA direct fining powers so it can hold airlines accountable when they flout the rules.”
ENDS
Notes to editors
Rights of replies
Which? asked seven airlines for information on how many of their UK domestic and international flights were delayed by at least three hours or cancelled within 14 days of departure in any of the last four years; how many passengers have claimed for and received compensation and the total amount of compensation for EC261-related claims paid by the airline.
British Airways and EasyJet declined to provide any data, citing commercial sensitivity. TUI did not provide any information. Jet2, Ryanair, Virgin Atlantic and Wizz Air did not reply.
A spokesperson for British Airways said: “We always meet our obligations under EC261.”
Additional information
1) Under EC261 rules, if a flight is cancelled, the airline must offer you the option of being reimbursed or rerouted (either on the next available flight or on an agreed date), and must also provide you with meals and telephone calls.
2) Under the same rules, if a flight is delayed by three hours or more in arriving at its destination, passengers can claim compensation which varies depending on the length of the delay and the distance they are travelling, and they could be entitled to compensation up to £520. The Department for Transport has proposed to scrap this framework for domestic flights that are delayed and offer compensation based on ticket price and the length of delay – similar to Delay Repay in rail.
- 25% of a ticket price for delays of over an hour and less than two hours
- 50% for delays between two hours and three hours
- 100% of the ticket price returned for delays of three hours or more
3) The changes would slash average payouts for consumers by £163, Which? found. For example, for a flight between London and Edinburgh with a full capacity of 180 passengers, an airline would potentially have to pay out up to £39,600 for delays of three hours or more. Under the government’s proposed scheme, the maximum payout is reduced to just £7,920.
4) DfT impact assessment on amending compensation rules for delays to UK domestic flights
The document states: “Discussions with industry during stakeholder engagement sessions highlighted calls from airlines for compensation rates to be amended to be more representative of the cost of travel. Low cost airlines have told DfT that the impact of the compensation on their turnover is far more material than it is for standard airlines, indicating verbally it can reach a value equivalent to 3% of their turnover. Unfortunately, they have not shared any evidence to prove this claim because of commercial sensitivities but we expect a cap of the compensation to the ticket price to be very welcome across all airlines and particularly the low-cost section. We welcome evidence to enable us to assess the scale of the problem as part of the consultation process.”
5) Which? response to the Department for Transport consultation on Aviation Consumer Policy Reform which closed in March – our view on the compensation proposals can be found from p32
6) There appears to be a data transparency problem affecting the travel sector that is wider than just this consultation. From our conversations with government, regulators, industry and fellow consumer groups, Which? has found the aviation industry is the sole gatekeeper of data on not only compensation, but also scheduling patterns around flight delays and cancellations.
Joint letter
Dear Secretary of State,
We write as consumer groups and businesses looking to work with your Department and regulators to build the travel industry back better post-pandemic; and enhance consumer protections at a time when budgets are tighter and many are planning to travel for the first time since the pandemic began.
We recognise the immense task you face working with regulators and industry to get the travel industry back on its feet. However, if the sector is to fully recover, the serious limitations and inconsistencies of the current regulatory and enforcement framework need to be addressed as part of your department’s long-term vision, helping rebuild consumer and business confidence. In order to create a well functioning and competitive market, it is essential that travellers can book with confidence, are protected when things go wrong, and have high levels of trust in the regulators and businesses that serve them.
We therefore warmly welcome the fact that your department has consulted on how consumer protections can be improved, including increasing the powers of the Civil Aviation Authority (CAA) and mandating alternative dispute resolution (ADR) in the aviation sector. We agree these reforms are needed and vital for building consumer protection and trust.
However we are of the view that other proposed reforms do not demonstrate a complete understanding of how the sector works and what consumers need. The DfT proposals on compensation, as also set out in the Aviation Consumer Policy Reform consultation, would in our view be a retrograde step. We are concerned that overall the proposals will leave most consumers whose flights are delayed worse off compared to the current compensation regime; and crucially, they will significantly weaken the financial deterrent which is currently a key aspect of the legislation to prevent airlines from delaying, cancelling or overbooking flights for commercial reasons.
We believe that it is imperative that consumers are offered the right protection that firstly ensures any disruption, inconveniences or losses they experience are minimised, and secondly, ensures that they are appropriately compensated when these do occur. The hollowing out or abandoning of the safeguards contained within the EC261 compensation regime would be a retrograde step, one that will lead to a further degradation in trust in airlines and hamper the recovery of the wider travel industry. We therefore urge you to urgently re-think these plans to change compensation rules under EC261, as presented in the consultation.
For businesses and consumers, it is vital to have a clear strategy from the Government that takes into account the views of businesses and consumer groups operating in the sector. We urge you and your department to work closely with other departments such as BEIS and regulators like the CAA and CMA, to design a joined-up strategy; ensuring any future reforms of consumer rights in travel, including potential review of the Package Travel Regulations, create a coherent and comprehensible set of protections for consumers.
We look forward to working with you to rebuild the travel industry and consumer confidence in it, and are determined to support the delivery of this. By working together we are confident that we can create a travel market that works for both businesses and consumers.
We look forward to hearing your response.
Rocio Concha
Director of Policy and Advocacy
Which?
Sam Seward
Managing Director
Exodus Travels
Jean-Phillipe Monod
SVP Global Government & Corporate Affairs
Expedia Group
Michael Edwards
Managing Director
Explore
David Harrington
Chief Executive Officer
HF Holidays
Joe Ponte
Chief Executive Officer
Hotelplan UK
John Mansell
Chief Operating Officer
Inghams Esprit and Santa’s Lapland
Emma Gray
Managing Director
Inntravel
Michael Higgins
Managing Director – Solicitor
Lovetts Solicitors
Simon Cooper
Chief Executive Officer
On the Beach Group plc
About Which?
Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation, we’re not for profit and all for making consumers more powerful.
The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at endorsementscheme@which.co.uk
Press Release