Payouts for cancelled or delayed flights to be cut to £57 under shake-up

Proposed government reforms will save airlines thousands of pounds (Photo: Getty Images)
Proposed government reforms will save airlines thousands of pounds (Photo: Getty Images)

Payouts to holidaymakers for cancelled or delayed flights could be cut to just £57 under a shake-up to rules.

Proposed government reforms will save airlines thousands of pounds while passengers are set to lose out, a consumer group has warned.

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What will it mean for passengers?

Which? said the proposals will see compensation for disrupted journeys slashed by £163 per passenger, reducing payouts from £220 each to just £57.

The reforms mean that airlines could save tens of thousands of pounds in compensation on a single flight.

The consumer group said the cheaper payouts could potentially “disincentivise airlines from providing a high standard of service” and may “weaken a vital deterrent against delays and cancellations”.

Under current EU261 rules, passengers travelling on domestic UK flights can claim £220 after a flight is delayed more than three hours.

The government is now considering scrapping this rule in favour of new legislation which mandates that compensation is based on ticket price and the length of the delay - similar to the current ‘Delay Repay’ system in force across the UK rail network.

The proposed change by the DfT would give passengers:

- refunds of 25% of a ticket price for delays of between one and two hours- refunds of 50% for delays of between two and three hours- full refunds for delays of three hours of more

A seven-week government consultation on the proposal, run by the Department for Transport (DfT), came to an end on Sunday 27 March.

In a statement announcing the consultation, Transport Secretary Grant Shapps said: “People deserve a service that puts passengers first when things go wrong, so today I’ve launched proposals that aim to bolster airline consumer protections and rights.

“We’re making the most of our Brexit dividend with our new freedoms outside of the European Union (EU) and this review will help build a trustworthy, reputable sector.”

How much would the change save airlines?

Which? used data from online travel agents Skyscanner to estimate how much airlines would save in payouts for long delays on some of the UK’s most popular routes.

For a flight from Edinburgh to London, which has an average ticket price of £44, an airline would potentially have to pay up to £39,600 for delays of three hours or more under current rules.

However, under the new proposals, the maximum payout would be just £7,920.

Similarly, a flight from Gatwick to Belfast, with an average ticket price of £55, would require an airline to pay up to £39,600 for a three hour delay under current rules.

This figure would drop to just £9,900 under the proposed changes.

The consumer group has warned that reducing compensation payouts will remove a deterrent against airlines letting passengers down.

It also said that switching to a system similar to that used by the rail industry would be unfair as cancelled flights could mean cancelled holidays, which would be far more costly than missing a train.

Which? is backing separate proposals in the same DFT consultation to grant fining powers to the Civil Aviation Authority and make it mandatory for airlines to join the Alternative Disputes Resolution scheme.

It has also called for the introduction of a statutory-backed aviation ombudsman.

Rory Boland, editor of Which? Travel, said: "Ripping up compensation rules would be a huge blow for passenger rights and embolden airlines to act with impunity.

"Unfair practices, such as overbooking and denied boarding, could once again become commonplace if this essential deterrent is removed, leaving passengers out of pocket.

"The government should...give passengers confidence that they will be protected when their journey is disrupted by giving the aviation regulator the powers it needs to crack down on airlines flouting the rules."