British Airways and Ryanair are being investigated over whether they broke competition laws by not offering refunds to customers facing cancelled flights due to the coronavirus pandemic.
The Competition and Markets Authority (CMA) said the companies should have issued refunds for the cancelled trips when planes were grounded due to the pandemic.
Investigators will be writing to both airlines and will also look at whether refunds should have been given where flights took place but non-essential travel was banned due to lockdown restrictions.
During the pandemic BA offered vouchers or rebookings, while Ryanair provided the option to rebook, the CMA added.
Legally, customers are entitled to a cash refund within 14 days.
The watchdog said: “The CMA is concerned that, by failing to offer people their money back, both firms may have breached consumer law and left people unfairly out of pocket.
“It is now seeking to resolve these concerns with the companies, which may include seeking refunds, or other redress, for affected customers.”
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CMA chief executive Andrea Coscelli added: “While we understand that airlines have had a tough time during the pandemic, people should not be left unfairly out of pocket for following the law.
“Customers booked these flights in good faith and were legally unable to take them due to circumstances entirely outside of their control. We believe these people should have been offered their money back.”
The agency added that it should not be assumed either airline has broken the law.
It comes after the CMA launched enforcement action against several package holiday firms, forcing them to agree to offer cash refunds to customers.
Last month, package holiday firms Teletext Holidays and Alpharooms agreed to hand back £7 million to customers who saw their holidays cancelled due to the Covid-19 pandemic.
It follows similar agreements made by LoveHolidays, Lastminute.com, Virgin Holidays and Tui UK, after thousands of customers complained that the companies had failed to refund them for cancelled trips.
The travel sector has been one of the hardest hit during the pandemic and has faced the most scrutiny from the CMA, which wrote to more than 100 firms reminding them of their responsibility to process all refunds within 14 days by law for any cancellations.
