Regulator to charge airlines £150 to investigate flight delay complaints

The Civil Aviation Authority (CAA) will charge airlines for every dispute its passenger advice and complaints team has to take on from Wednesday 1 June which relates to breaches of European law covering flights, including compensation for flight delays and cancellations.

The move comes as the CAA's long-standing plan for airlines to sign up to ombudsman type schemes appears to have stalled. Just one EU airline has so far started using a UK scheme, and budget giant Ryanair – which had agreed to be part of a scheme – has been forced to pull out after Ombudsman Services, the first body to be approved to take on aviation complaints, said it no longer wanted to take part.

The new CAA charge could make airlines more willing to settle legitimate claims in the first instance, rather than risk the £150 charge. See our Flight Delay Compensation guide for how to claim up to £460/person back to 2010, and our free reclaim tool.

What's the current situation?

If you make a claim for a flight delay or cancellation and the airline says no, it's not the end – you can appeal to a regulator or ombudsman–style scheme. Exactly who you can appeal to depends on where you flew from and to and where the airline you flew on is registered – see Who to go to if the airline turns you down for more details.

Within the UK, currently only Thomson is signed up to an adjudication scheme. If Thomson rejects your claim, you can escalate it to the Centre for Effective Dispute Resolution (submit your complaint here). If your claim, for yourself or a group, is unsuccessful you'll be asked to pay a £25 fee, but if you're awarded any amount of compensation this fee will be waived. The CAA says its complaints team won't take on a complaint if you have the option of an ombudsman–style scheme.

Otherwise your only option within the UK currently is to refer your case to the CAA itself – though it's not an ombudsman, so its rulings aren't technically binding. You can submit your complaint via the CAA website – it'll take about a week to decide if it can accept your case, and if it does, it'll then aim to give a final decision within 9-12 weeks. There's currently no charge for airlines or passengers if complaints are escalated to the CAA.

CAA to charge airlines £150 to investigate flight delay complaints as ombudsman schemes stall

What's changing on 1 June?

From 1 June, airlines which haven't signed up to an ombudsman–style scheme will have to pay £150 for every escalated complaint the CAA's passenger advice and complaints team agrees to take on. The complaints service will continue to be free to passengers.

The change could push airlines to settle legitimate claims more quickly, to avoid incurring a charge for escalated complaints. It may also push airlines to sign up to ombudsman schemes if they're cheaper.

Bizarrely, while airlines will be forced to pay for each case the CAA investigates, they still won't be bound by the CAA's ruling.

How do the ombudsman-style schemes work?

Ombudsman, or alternative dispute resolution (ADR) schemes, which are approved to adjudicate aviation complaints, have to look at the evidence from the passenger and the airline and give a ruling. If an airline's signed up to an ombudsman scheme, that means it agrees to abide by its ruling and in most cases pay out any compensation within 20 days.

The schemes could, however, mean passengers have to pay to escalate their complaint, as some will charge a fee. The maximum they can charge is £25 – this must be refunded if your complaint is upheld in any way, even if you only get an apology.

EU law states consumers must be told whether the airline is signed up to an ombudsman-style scheme, but doesn't force airlines to sign up. Currently there are two such schemes in the UK, which have been approved by the CAA and Secretary of State for Transport:

ADR schemes

What about Ombudsman Services?

Ombudsman Services, which handled more than 200,000 complaints last year in sectors such as energy, renting and private parking, was the first body approved by the CAA to take on aviation complaints. It was set to launch its flight delays scheme in the spring, but withdrew earlier this month.

Ryanair had agreed to escalate complaints to Ombudsman Services but has been forced to pull out. As a result it's now looking for a new ombudsman scheme.

A spokesperson for Ombudsman Services says: "When alternative dispute resolution (ADR) in aviation first became a possibility it looked like it would be similar to the regulated sectors in which we work, and the aspiration of the Civil Aviation Authority (CAA) seemed to be pointing towards the type of scheme and service that we currently run successfully in energy and communications sectors.

"The reality has been very different, with both the trade bodies and the airlines reluctant to proceed with any ADR scheme, with price rather than quality being the dominant factor. "As a consequence, we do not believe that the product the airlines are seeking accords with our corporate strategy and we will therefore stop marketing ourselves to the industry. If a mandatory ombudsman scheme along the lines first envisaged by the CAA is introduced, we may reconsider our position."

What are the airlines doing?

We asked eight major airlines what they were planning to do. Here's what they told us:

• British Airways – considering the options

• Easyjet – aiming to sign up to an ADR scheme

• Flybe – reviewing its options

• Monarch – remaining with the CAA scheme for now

• Ryanair – will sign up to a new ADR scheme

• Thomas Cook – aiming to sign up to an ADR scheme

• Thomson – signed up

• Virgin – waiting to see how the scheme works in the UK

What does the CAA say?

The CAA says it had originally hoped to close its own complaints team when at least 50% of all passengers flying in and out of the UK were able to use an ombudsman scheme.

Following concerns that only half of passengers would have access to an ombudsman scheme, and so too many passengers would be left without anywhere to go (other than court) if the airline refused to settle their claim, the CAA has agreed to keep its complaints system open until all passengers are able to use an ombudsman.

A CAA spokesperson says: "While the passenger advice and complaints team is not an ombudsman, it has had great success in the past, winning around €17 million in compensation for passengers in just over two years".

In March this year the CAA wrote to airlines to propose the changes and ask them which ombudsman scheme they would be using, how they would be telling passengers about the scheme and about the letter they would send after rejecting a complaint.

It's said if not enough airlines sign up to ADR schemes in future, it will look at calling for the law to be changed so they have to. It's also agreed to review the £150 charge in 12 months.