MPs have backed the idea of airline passengers being automatically granted compensation for delays, a move that would kill off the business model of firms specialising in the sector. 

The transport select committee today made the proposal as part of its report on supporting recovery in aviation. Members also suggested that the Civil Aviation Authority receive powers to fine airlines that do not provide complete refunds to consumers when required to do so by law.

The committee report states: ‘Even when airline passengers are entitled to a refund, they can struggle to secure the refunds that they are owed. Those challenges apply to both individual passengers and travellers who book flights through third parties. Accessing refunds from airlines has been a long-standing challenge for consumers, pre-dating the coronavirus pandemic.’

The committee said the government should introduce a mechanism to ensure that when entitled to a refund by law, airline passengers are granted automatic compensation. This would address the issue of customers having to go through a claims management company or other legal representative.

The industry around flight claims has emerged in the last decade as consumers’ rights to claim compensation have been extended. It has also spawned a slew of satellite litigation where airlines have sought to avoid paying out, and most recently a Supreme Court ruling where justices upheld north west firm Bott & Co’s right to recover costs from flight compensation paid out by Ryanair.

The transport committee questioned separate government proposals – currently out to consultation – to align UK flight delay compensation with the type of scheme used for delayed rail passengers. This staggers the amount of compensation based on the length of delay and as a calculation of the cost of a ticket.

‘Although moving to a compensation scheme that is similar to the delay repay rail scheme might be desirable for consistency, in many cases flight delays are far more costly to the passenger than a delayed rail journey,’ the report states. ‘Delayed air passengers can face missing holidays or increased travel and accommodation costs. The government must take those factors into account in designing a new scheme.’

 

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