Dear Chair and Committee members,
I would like to thank you again for the opportunity to provide oral evidence to the Committee’s inquiry into the impact of the coronavirus pandemic on the UK’s aviation sector.
While I recognise that the majority of the recommendations set out in the Committee’s report were directed towards the Government, I wanted to write to you to provide a broad response on behalf of the UK Civil Aviation Authority (CAA), as well as responding to the two recommendations that are directed to the organisation (recommendations 14 and 19).
The CAA welcomes the Committee’s inquiry and its recognition of the significance of the current pandemic on the aviation industry and its consumers. It is worth reiterating a point frequently made: that the scale of the crisis for the industry cannot be underestimated. Aviation has proven its resilience time and time again, but this is already proving to be a deeply challenging period and we should expect a long recovery.
We have been working closely with the Government and the industry since the initial phase of the pandemic. We have sought to act pragmatically and flexibly to the challenges faced by the industry, which includes providing alleviations and exemptions where possible so that licences and approvals can be maintained. In addition, we have paused the increase to our annual charges, and are keeping this under constant review. And we continue to collaborate closely with our international partners in finding solutions to the industry’s challenges, reflecting the global nature of the sector. The CAA remains determined to play our full role in facilitating the industry’s recovery, working closely alongside the Government.
It is not only the industry, however, that has suffered as a result of the pandemic. Consumers of aviation have been left facing considerable uncertainty, which has only been exacerbated by the challenges many of them have experienced in receiving a cash refund for cancelled flights. While I will address the matter of our enforcement powers later in this letter, I want to be absolutely clear with the Committee that consumers have the right to a cash refund where their flight has been cancelled.
When I provided oral evidence to the Committee in May, I mentioned that the CAA had launched a review into the refund policies and performances of airlines during the pandemic. We concluded this review in July.
At the start of our review, some airlines were not paying refunds, with others facing potential backlogs of numerous months. We now have evidence, however, that shows that as a result of our interventions through our review, all UK airlines are now paying refunds. Call centre wait times have reduced, in some cases significantly, and customer service messaging has provided greater clarity on consumers’ rights to a refund for cancelled flights.
Unfortunately, our review found that a number of airlines were not performing adequately. Through our action and engagement, we have gained immediate commitments from these airlines to improve their performance and the time taken to provide refunds to consumers, without requiring enforcement action. This is the most immediate way of providing benefits to consumers as enforcement processes can take a considerable amount of time to complete given the potential for legal proceedings. Should any airline fall short of the commitments they have made, we will not hesitate to take further action where required.
The Committee’s report shines a light on these matters among many others, and I would like to thank you all again for this important contribution. I would now like to turn to the two recommendations that are directed to the CAA.
We recommend that the Department for Transport and the Civil Aviation Authority explore every avenue available to ensure that recent changes and their impact on the availability and distribution of airport slots do not unfairly impact passengers. This should include referring the whole aviation industry to the Competition and Markets Authority for a market study and possible investigation.
The CAA has no role in allocating slots at UK airports, a responsibility that sits with Airport Coordination Limited (ACL). Ultimate responsibility for changes to the policy relating to slot allocation sits with the UK Government.
As an economic regulator with competition powers, however, we do have an interest in making sure the aviation industry and the markets that facilitate it work in the interest of consumers.
We will therefore support any work the Government chooses to do while developing its recovery plan for the aviation industry. We are working closely with the Government on the development of this plan in the lead up to its autumn publication and will continue to provide advice on these matters in our discussions.
We recommend that the Department and CAA conclude speedily a review of the CAA’s powers, to ensure that it can enforce the rights of passengers in an effective and timely way in future.
During the evidence I provided to the Committee, I was clear that the CAA’s enforcement powers in relation to airline refunds are insufficient in supporting the speedy redress of non- compliance by airline operators.
Our powers derive from the Enterprise Act 2002, and give us the ability to request information from businesses, seek undertakings from the business and enforcement orders from the courts to stop an infringement. To do this, we have to go through a lengthy process, ultimately through the courts, to ensure compliance. Unlike other sectoral regulators, we cannot impose fines on businesses.
While we have used our powers extensively in the past, they are not well-suited to swift action and it can take a considerable period of time for a case to come before the courts. This leads to a period of time when a business may be able to continue breaching the law without sanction. We believe improved powers will provide us with a more flexible enforcement toolkit to allow us to deal more effectively with a wide range of compliance issues.
The current Government has acknowledged the need to review these enforcement powers, and we will continue to work closely with them on this issue.
I do hope the Committee finds this useful. Should any Members of the Committee require any further information regarding the contents of this letter, or any other areas of our work, our dedicated Parliamentary team and I would be very happy to assist. Please do not hesitate to contact me directly or the team at email@example.com.
Richard Moriarty Chief Executive
Published: 7 September 2020