Flight cancellations: Government plans to slash compensation for UK trips

·Finance Reporter, Yahoo Finance UK
·4-min read
Passengers queue to check-in for a Qatar Airways flight in Terminal 5 at Heathrow Airport as the Transport Secretary is risking travel chaos by rejecting calls for an emergency visa for aviation workers, industry bosses have claimed. Picture date: Friday June 3, 2022.
Airlines have been told to review summer schedules after half-term chaos.

The Department for Transportation has plans to slash compensation payouts when UK domestic flights are severely delayed or cancelled, Which? has warned.

Amid the travel chaos that has seen hundreds of flights disrupted, the reforms could slash average payouts by £163 per passenger according to research by the consumer body.

The government’s plan comes after lobbying from low-cost airlines, which claimed compensation fees could amount to up to 3% of their annual turnover.

The new scheme would only offer refunds based on ticket price and the length of delay instead – like the Delay Repay system in rail.

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.

Read more: Flight delays: airline passengers waiting up to 5 years for compensation

“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.”

Which? asked seven airlines - BA (IAG.L), EasyJet (EZJ.L), Jet2, Ryanair (RYAAY), TUI, Virgin Atlantic and Wizz Air (WIZZ.L) – 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.

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 requires airlines to compensate passengers when flight delays or cancellations result in passengers reaching their final destination more than three hours later than originally scheduled.

Which? said practices like overbooking and denied boarding could “once again become more commonplace” if the new rules are overhauled.

The consumer body and and industry representatives have written to Transport Secretary Grant Shapps, urging him to abandon the proposed reforms.

“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,” they said in the letter.

The UK government has ordered airlines to cancel flights now, rather than later, to prevent last minute misery for travellers.

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The demand comes after weeks of chaos across European airports, with thousands of holidaymakers facing delays, queues and cancellations.

The Department for Transport and the Civil Aviation Authority stated that earlier cancellations are “better” than axing flights on the day of departure.

They issued a joint letter to the aviation industry calling on companies to take “all possible steps” to “avoid the unacceptable scenes we have recently witnessed”.

The disruption has been blamed on aviation firms struggling to recruit enough staff to cope with the spike in demand for travel, after thousands of jobs were cut in 2020 due to the coronavirus pandemic.

Gavin Lapidus, director at travel agency eShores, has some tips on how passengers can minimise disruption.

“This first and most important tip is to ensure that you’re booking an ATOL package with your journey. If a flight is cancelled, the holiday operator the package is booked through is responsible to find an alternative flight. If they can’t find an alternative, meaning you can’t go on the holiday, they have to provide a full refund – so in this worse-case scenario, your funds are at least protected.

"Avoid booking one-way flights, because if one is cancelled but the return isn’t, you could be stuck with a one-way flight you can’t use!

"Use travel agencies that make life easier. As a holiday company, we can’t control flight cancellations, but we’ll cover the additional cost to find and book an alternative, relieving the stress from the client. However, if we can’t provide and alternative flight, we’ll offer a full refund or help the client find an alternate holiday using the funds. So in a situation where we can’t get them flights for their holiday but they’re desperate to get away, we’ll always find another suitable holiday.”

Watch: Airline refunds: What are your rights as a consumer?

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