On The Beach hails Ryanair court win and slams airlines for ‘anti-competitive behaviours’

Travel giant On The Beach has slammed low cost airlines for their “anti competitive behaviours” - and has vowed to keep pursuing Ryanair after a £2m court victory.

The Manchester group today announced record revenues for 2023 - and also said it had won a legal claim against Ryanair over outstanding refunds on cancelled or changed flights. It said it had been awarded £2m plus interest and costs.

OTB said it intended to pursue Ryanair “for further sums due in similar circumstances”. And it also called for action from the Competition and Markets Authority (CMA) over the actions of low-cost airlines.

In his statement to the Stock Market today, CEO Shaun Morton said the travel industry urgently needed “holistic and comprehensive regulatory reform” to create a level playing field for businesses and consumers.

He said: “For most customers in the UK who are booking their annual beach package holiday, this will likely be the biggest investment they will make throughout the year, unless they are moving house or changing their car. A recent study found that households spend a quarter of their disposable income on holidays. It is therefore critical that competition in the market is healthy to ensure value, choice, flexibility and consumer protection.

“However, the market power of the few airlines operating popular leisure routes from the UK, and how that power manifests itself to the detriment of consumers, poses a serious threat to fair competition and choice for consumers. Low cost airlines ('LCA') are using anti-competitive behaviours to stop consumers booking through online travel agents, harming consumers in the process.

“These increasingly sophisticated anti-competitive behaviours include blocking OTA (online travel agency) bookings, reducing or removing seats to certain destinations, making them completely unbookable by OTAs or consumers unless booked directly with the airline; harming the consumer experience with onerous verifications only applied to bookings made with an OTA; and false and misleading smear campaigns that cast doubt in the minds of consumers about the validity and benefits of booking package holidays with OTAs.”

Mr Morton said OTB has surveyed customers for a white paper- and found half of those polled believed low-cost airlines treated travellers badly.

He added: “We continue to challenge Ryanair on its anti-competitive behaviour and withholding of refunds through ongoing litigation. We recently successfully sued Ryanair for £2m of outstanding flight refunds. This common-sense outcome should not have taken a protracted and expensive legal process to resolve.

“Both OTAs and LCAs have called for regulatory intervention and the CMA has the power to exercise a review of the market to preserve competition and protect customers. We continue to encourage the Government and Regulators and other online travel business to ensure the CMA steps in to take action to protect holidays for everyone.”

Mr Morton said OTB was also taking part in the Civil Aviation Authority’s ongoing consultation into reform of the longstanding ATOL scheme to protect customers.

A CMA spokesperson said: “Taking action in the areas that are important to people – such as travel – is an ongoing priority for us.

“In recent years, we secured a major overhaul of the sales practices used by hotel booking sites, ensuring that sales tactics that could mislead consumers are stamped out, as well as getting hundreds of millions in refunds for people whose package holidays were cancelled due to COVID-19.

“We continue to actively monitor developments in the sector.”

OTB also said in its statement today that Ryanair had launched legal action against it in 2020 over alleged infringement of intellectual property rights. The legal process is ongoing and no trial date has yet been set. OTB said: “The Group expects that final resolution of the dispute might take some time.”

Ryanair was approached for comment on this story but has not yet responded.

In the past, Ryanair has criticised online travel agents for reselling its tickets, saying passengers should book directly through Ryanair and that it needs to deal with passengers directly.

In August, the airline demanded that the CMA act against the Online Travel UK Association, accusing travel agents of overcharging customers. Its CEO Michael O’Leary said: “We are amazed that the UK Consumer Agencies and the UK Govt have failed to take any action against this rampant internet piracy, and this overcharging of unsuspecting consumers for air fares or ancillary services.”