Could Ryanair’s 'pilotgate' spell the end of cheap flights?

Ryanair has apologised to 800,000 passengers for cancelling their flights because of a pilot shortage, and then misleading them about their rights.

But an obligation to meet travellers’ out-of-pocket expenses has raised fears that airlines’ costs – and fares – could soar because of demands for recompense.

Airlines who cancel flights appear to have an open-ended liability for out-of-pocket expenses, which could include anything from tickets for an FC Barcelona Champions’ League football match to lost wages.

The payments are additional to EU requirements to cover hotel rooms and meals connected with flight disruption. Costs could feed through to more expensive tickets – which, with supply reduced because of mass cancellations by Ryanair, are already rising.

Paul Charles, former communications director for Virgin Atlantic and Eurostar, predicted: “Fares won’t rise on Ryanair, only on other carriers as they gain from extra demand.”

But Malcolm Ginsberg, editor-in-chief of Business Travel News, said: “Initially fares [on Ryanair] are going to be very, very cheap, but then they’re going to steadily go up.”

The Civil Aviation Authority (CAA) had demanded a statement from Ryanair explaining its obligations under European passengers’ rights rules. The airline complied shortly before the 5pm deadline.

The statement explains in unprecedented detail the options open to passengers whose flights are cancelled: a Ryanair flight, if one is available on the same route on the same or next day; a Ryanair flight from a nearby airport; a flight on one of Ryanair’s seven “disruption partner airlines”, including easyJet, Jet2, Aer Lingus and Norwegian; or “comparable alternative transport” by air, rail or road.

Europe’s biggest budget airline also promises to “reimburse any reasonable out-of-pocket expenses incurred by customers as a result of these flight cancellations”.

Passengers who have already accepted a refund or alternative Ryanair flight are able to reconsider, while those who have booked on a rival airline can claim the difference in fare paid.

The improved offer to passengers could double Ryanair's previous estimate of €50m in extra costs because of the debacle. This represents less than 5 per cent of its expected full-year profit. But the obligation to refund “any reasonable out-of-pocket expenses" could add significantly more. “This could open the floodgates to claims,” said one senior aviation executive.

The source said: “This is yet another turn of the screw on airlines who face a disproportionate obligation compared with other forms of transport. While some passengers will do extremely well out of claiming out-of-pocket expenses, overall it can only increase air fares.”

The move came two weeks after Ryanair began to cancel hundreds of flights at very short notice, having “messed up” rostering of pilots. It initially cancelled a tranche of 2,100 departures until the end of October, saying that its winter programme would be unaffected.

But on 27 September Ryanair said it would ground 25 of its jets this winter – representing one-16th of its fleet – and cut 18,000 flights from the schedules.

By giving more than two weeks’ notice of cancellations, the airline avoided the obligation to pay cash compensation.

Affected passengers were emailed with two options: a refund, or re-booking on a different Ryanair flight. The option to fly on a rival airline at Ryanair’s expense was not mentioned – an omission that infuriated the CAA’s chief executive, Andrew Haines.

In a series of letters to Ryanair, he set out a list of demands on behalf of passengers booked on flights to, from or within the UK. They included offering everyone affected the option of being booked on a different airline.

Andrew Haines, chief executive of the CAA, said: “Our job is to protect passengers’ rights and ensure that all airlines operating in the UK are fully compliant with important consumer laws.

“Where we find that an airline is systematically flouting these rules, we will not hesitate to take action, to minimise the harm and detriment caused to passengers, as we have done with Ryanair in recent days. It appears that Ryanair has now capitulated.

"We will review their position in detail and monitor this situation to ensure that passengers get what they are entitled to in practice."

Ryanair has counter-attacked the CAA for failing to take action against British Airways after its IT collapse in May, saying: "A computer meltdown stranded hundreds of thousands of British citizens/visitors at London Heathrow and many other airports, with no apparent action taken by the CAA in respect of re-accommodation or enforcement against British Airways."

Victoria Moores, European Bureau Chief of Air Transport World, said the reputation damage of the cancellation saga will ripple well beyond Ryanair: “It’s going to affect other carriers negatively. There’s a perception out there that airlines drag people off flights, they nickel and dime their customers, and really don’t give a damn.

“Every negative story affects the entire industry."

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