On 31 October 2023, the High Court of England and Wales (Commercial Court) issued a judgment in a case concerning a £2 million dispute between three travel agents and Ryanair over flight refunds for package holidays, with a judgment favoring the former.

This case involves a dispute between On The Beach Limited, Sunshine.co.uk Limited, and Classic Package Holidays Limited (collectively referred to as "OTB Group"), who are online travel agents, and Ryanair, a major airline carrier. The case centers around a claim by OTB Group for a sum of approximately £2 million, representing the cost of flights refunded to travelers for package holidays when Ryanair had canceled or made significant changes to the flights that were part of these packages.

The dispute is part of a broader and long-standing conflict between Ryanair and online travel agents regarding the extent to which these agents can book flights operated by Ryanair. The Court noted that Ryanair has acknowledged its willingness to refund the cost of flights that have been canceled, provided certain arrangements are in place to prevent double refunds.

OTB Group claimed that they are entitled to refunds for 4,191 holiday bookings associated with package holidays that included Ryanair flights. They asserted that these flights were canceled or significantly altered by Ryanair, and the airline offered refunds to travelers. OTB Group maintained that they have refunded their travelers for these flights, but Ryanair has not refunded them. Ryanair disputed the validity of OTB Group's claims, arguing that OTB Group's purchase of flights through online travel agents breaches their terms of use. Ryanair contended they have no contractual obligation to refund travelers who used online travel agents but are willing to do so under certain conditions.

The Court first recalled the regulatory framework governing travelers' rights and refunds. The case involves regulations related to consumer protection, including the Package Travel and Linked Travel Arrangements Regulations (PTRs), Directive (EU) 2015/2302, and Regulation (EC) 261/2004. The court emphasizes that the PTRs, which are a part of UK legislation, implement EU Directive 2015/2302 and provide clear provisions regarding package travel contracts, refunds, and the right of redress. It is noted that liability for package performance lies with the organizer, whether the services are provided directly or through third parties, to ensure consumers do not have to deal with multiple parties in case of issues.

The main issue was whether these regulations create a free-standing right of redress or merely preserve the organizer's rights to seek recovery from travel service providers under existing contracts. Indeed, Ryanair's website terms of use and general terms and conditions of carriage restrict refunds except under specific circumstances. On the other hand, OTB Group's booking conditions include the PTRs' implied terms, particularly regarding significant changes to packages.

The Court analyzed whether Regulation 29 of the PTRs establishes a right of redress for package travel organizers, and concluded that it did indeed confer a statutory right of redress to organizers based on its wording, the overall framework of the PTRs, and the Directive's intention to ensure consumer protection.

The Court concluded that the OTB Group faced unavoidable and extraordinary circumstances due to the COVID-19 pandemic, and they offered flight refunds to travelers, which were accepted. The Court noted that there was no evidence suggesting the OTB Group could have provided alternative holidays in these situations.

On the issue of causation, Ryanair had argued that OTB Group's actions contributed to the cancellations. The court rejected this argument and found that OTB Group's claims were valid. It stated that the way OTB Group accessed Ryanair's website did not break the chain of causation.

The judgment also addressed vouchers, refunds, and the definition of significant changes in detail. The Court found that vouchers issued by Ryanair do not discharge their liability and that OTB Group is entitled to reimbursement in certain cases.

In the end, the court calculated the amount that the OTB Group is entitled to as £2,056,745.30.

Reference : On the Beach Ltd & Ors v Ryanair UK Ltd & Anor [2023] EWHC 2694 (Comm) (31 October 2023).

Full text of the decision available at bailii.org en