Thursday, 30 July 2020

Virgin Atlantic - one of the slowest UK airlines to process refunds

Virgin Atlantic is taking on average over 120 to process refunds for passengers who have had their flights cancelled due to the coronavirus COVID-19 pandemic, the UK's Civil Aviation Authority has revealed today.

The CAA conducted a review of a number of airlines and their refunds process following an avalanche of customer complaints in the wake of the mass cancellations airlines made when trave restrictions were first introduced. Many customers had been frustrated at the time it was taking for refunds to be made. Whilst thousands of others were only offered vouchers for money off future travel arrangements.

The review published on Thursday showed that out of thirty airlines, only three were doing an adequate or good job of providing refunds to passengers.

Under the regulations, passengers who have had a flight cancelled, are legally entitled to a refund within seven days. Jet2, United Airlines and American Airlines were the three carriers performing well, with the report saying these airlines had been "identified as having been consistently processing cash refunds quickly and as having only a small backlog of refund requests." 

Among the worst are Ryanair, TUI and Virgin Atlantic, with all three receiving warning letters and were being kept under close observation.  

In the report, it states that 'Virgin Atlantic is one of the airlines that our review identified as not processing refund requests sufficiently quickly and as having a sizeable backlog of refund requests. In relation to refund processing timescales, at least initially the airline was taking up to 60 days to process refund requests. However, the airline’s performance became significantly worse and it provided a commitment to consumers that the maximum wait would be 120 days. The CAA was not satisfied with this level of performance and requested that Virgin Atlantic provide it with commitments to reduce the time taken to process refunds, such that they are processed in a reasonable timeframe and one which is
aimed at the 7 day period set out in Regulation EC261/2004. 

Virgin Atlantic has committed to reducing the maximum time taken to process a refund and it expects to process all claims made in August within 80 days, all claims made in September within 60 days and all claims made in October within 30 days. We recognise that even with these improvements to processing times it still results in a lengthy wait for consumers. However, we consider that the improvement in the processing time is a step forward and provides greater clarity for consumers. We will continue to work with Virgin Atlantic and push them for further improvements to the timescales. Given the extended timescales even in September and October, we will be monitoring Virgin’s performance particularly closely and will consider the use of formal enforcement powers if necessary.'


TUI was another of the airlines the CAA was not happy with, the holiday carrier was not processing refund requests sufficiently quickly and had a sizeable backlog of refund requests.  The CA also objected to TUI's policy of automatically issuing a credit note for cancelled flights, rather than giving customers an option. Customers would then have to wait another 28 days before they could then apply for a cash refund which would then take a further 28 days.  The CAA was not satisfied with this level of performance and requested that TUI provide it with commitments to reduce the time taken to process refunds, such that they are processed in a reasonable timeframe and one which is aimed at the 7 day
period set out in Regulation EC261/2004. 
With the prospect of further action likely, TUI has now confirmed it has added staff to process refunds and would no longer automatically issue credit notes and would automatically start the cash refund process once it notifies passengers of the cancellation of their flight. TUI says on average, cash refunds will be processed within 14 days.

Loganair was another airline the review mentioned for not processing refund requests sufficiently quickly and as having a sizeable backlog of refund requests. In relation to refund processing timescales, at least initially the airline was taking up to 90 days to process refund requests, although the airline was working to improve its performance the majority of claims are still taking between 60-90 days. The CAA was not satisfied with this level of performance and requested that Loganair provide it with commitments to reduce the time taken to process refunds, such that they are processed in a reasonable timeframe and one which is aimed at the 7 day period set out in Regulation EC261/2004. Loganair noted that restrictions in Scotland have been more stringent than in England and have lasted for longer, impacting on its ability to get staff back into the office.

The low-fare-high-fee Ryanair was taking on average 10 weeks to process cash refunds which the CAA was not satisfied with.  The budget carrier has now published a new set of guidelines and time frames in which it says it will work to in order to pay refunds more quickly.  The situation is currently being monitored by the CAA.

The report also said a  number of airlines had not been offering cash refunds, but only credit notes or travel vouchers for future travel use.  This group included Etihad Airways, Air Transat, Malaysia Airlines WestJet and Turkish Airlines.  

The CAA identified a number of compliance issues and worked informally with airlines to achieve improvements for passengers. "We have ensured that airlines are offering the choice of a refund and making it clearer to passengers what their options are and how to request a refund. We have also achieved improvements in call centre performance. A number of major airlines have also committed to speeding up the time it is taking process refunds and we welcome the steps those airlines have put in place. We will continue to monitor those airlines and continue to push for further improvements. We will also consider if enforcement action is appropriate if airlines fail to meet the commitments they
have made to us and their passengers. "










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