Online travel agency On the Beach has secured a legal victory against Ryanair in a long-running dispute over third-party booking applications.
In a first-of-its-kind case, the High Court ordered Ryanair to pay £2m to On the Beach for flights it cancelled or significantly changed during the pandemic. According to Fox Williams, the law firm that represented On the Beach, the judgment delivered on 31st October 2023 ‘has set an important legal precedent in relation to the rights of package holiday organisers to seek refunds from airlines’. The law firm explained that the ruling has ‘clarified the law’ and is expected to pave the way for similar claims in the future.
Due to flight cancellations and major changes made by the airline during the pandemic, these holidays had to be cancelled and refunded. On the Beach asked Ryanair to refund the price paid for the flights, which it refused.
Ryanair has always encouraged travellers to book directly through its website and it did not licence its seat booking database with On the Beach, which it believed to use practices such as using dummy email addresses and credit card details to complete bookings. According to the airline, this means that it is unable to communicate with its passengers directly to advise them of delays or cancellations. It also alleged that third party bookers routinely inflate the price of flights and luggage to the consumers compared with booking directly.
On October 27th, ahead of the ruling Ryanair issued a statement where CEO Michael O’Leary stated that he felt the CMA and CAA should investigate online travel bookers, which in his opinion, ‘overcharge consumers’ and ‘provide no useful service whatsoever’.
In bringing its claim, On the Beach’s legal team used the following legal bases:
Regulation 29 of the Package Travel Regulations 2018, which provides a “right to redress” for package organisers against third parties which cause them loss. In this case, On the Beach claimed that Ryanair’s flight cancellations and major changes caused it to have to cancel package holidays and refund customers and the law of unjust enrichment, which provides package organisers with a right to claim a contribution from third parties whose own liability to refund the customer is extinguished by a payment made by the package organiser. In this case, On the Beach claimed that its package holiday refunds extinguished Ryanair’s obligation to refund the customer.
Following the ruling, On the Beach issued the following statement: “The High Court of Justice found in On the Beach’s favour in its application for summary judgment against Ryanair for refunds paid to customers by On the Beach following flights which were cancelled or subject to a major change during the pandemic. The case was launched in October 2021.
“The court found that Ryanair had no real prospect of successfully defending the claims that it was obliged to refund the monies to On the Beach”.
“As such, On the Beach has been awarded the sum of c£2m and will also be seeking its costs of the proceedings.”