Danni Hewson AJ Bell financial analyst comments on CMA and CAA joint open letter to airlines:
“The airline sector hasn’t done a great job of navigating its post-covid return. It wanted to take advantage of the surge in demand from consumers desperate for a foreign break - a bit of sun or a chance to reconnect with friends and family. But it has just not been able to deliver the kind of schedules required in time for those big holiday moments. Airlines have struggled with recruitment and in biting off more than they could chew, which has left consumers with a great big headache.
“Images of queuing families, social media posts full of horror stories of people left stranded or getting cancellation emails on their way to the airport just hours before they were due to depart have left a bitter taste. The CMA has warned that any repeat this summer could force them to take action.
“Most airlines have already taken a big red pen and re-drawn timetables, lowering the number of flights they expect to operate and even taking out seats on planes to allow them to operate with fewer staff. The changes have been made in good time, meaning that although people who’ve found their plans altered or cancelled will be feeling a bit miffed, at least they have time to make alterations without being landed with big, unexpected bills.
“And that’s one of the areas the CMA has been particularly concerned about - the level of service that’s been provided when disruption occurs and the fact many people have been left to fend for themselves, often at great expense. It has warned airlines that they need to think ahead and to take responsibility for customers who might not have the cash or the ability to get themselves where they need to go.
“Compensation must be paid quickly, and arbitrary limits shouldn’t be set on levels of compensation, plus travellers need to be kept well informed of cancellation policy and not find themselves struggling to pore over the small print.
“It’s about transparency and boosting confidence, both things which are in airlines best interests. The sector needs bookings to stay robust if it is to recover from its covid crisis. The watchdog does admit that some carriers have performed better than others and there will be little doubt that would-be travellers will be paying close attention to headlines.
“The sector is still struggling, and investors have been wary. Share prices across the board have taken a double digit hit since the start of the year. Getting this summer right will go a long way to addressing concerns, and today’s joint letter effectively puts airlines on notice.”
