On the Beach calls for CMA to stop low cost carriers’ ‘aggressive tactics’ as long-running feud heats up
A long-running feud between online travel groups and low-cost carriers is heating up after holiday retailer On the Beach Group called on the UK competition regulator to step in to protect consumers.
In a report sent to the Competition Markets Authority (CMA), the aviation watchdog and a host of senior transport ministers, On the Beach slammed the “aggressive tactics” used by low-cost carriers to “remove consumer choice from the market”.
Online travel agents (OTAs) have — for years — clashed with budget airlines, who prefer when customers book direct as they can sell them add-ons such as extra luggage space.
Ryanair has been particularly vocal in its criticism of third party bookings, which it argues prevents it from dealing with customers appropriately.
The report, which was shared with transport secretary Mark Harper, claims carriers are mistreating OTA customers by sending communications which aim to frighten them into thinking their booking isn’t real or lawful.
It noted isolated cases of airlines removing customers from overbooked flights ahead of package customers.
The submission calls for the CMA to launch a full market review into carriers’ practices and create a code of conduct for the groups to operate together.
On the Beach said that the tactics employed by budget carriers would reduce competition, adhere to regulations and bump up holiday prices.
These include “strategically reducing seat-only availability” for OTAs to encourage more direct bookings, making it more difficult for OTAs to contact consumers with key information, and charging OTAs excessive booking fees, which drives up seat prices.
The report claims Ryanair has taken steps including blocking third-party bookings and rejecting credit cards and accuses the airline of “reputational attacks” in public campaigns, designed to deter consumers from booking with OTAs.
Tensions between OTAs, Ryanair and other airlines have been growing throughout the year, with shots fired from both sides and ongoing battles playing out in court.
In August, a number of European companies including Booking.com and Skyscanner wrote to the UK government to highlight Ryanair’s “invasive verification procedure” for passengers who book via third parties, which they claimed are in breach of data protection laws.
Ryanair has previously described OTAs as “screenscrapers” and “internet pirates” and argued the groups mislead passengers “to believe they are getting the cheapest price… by falsely advertising lower fares” than airlines.
Chief executive officer of On the Beach, Shaun Morton, said: “Low cost airlines are taking advantage of their market power and using anti-competitive behaviours, scaremongering tactics and smear campaigns to remove consumer choice, degrade the customer experience and purposefully make life difficult for online travel agents.”
“My hope is that the CMA will act quickly to safeguard consumer choice because if not, competition will reduce, adherence to regulations and customer service will deteriorate further, and holiday prices will only increase.”
Shaun Morton, chief executive officer, On the Beach
In a statement to Morning Wire Ryanair refuted all allegations made by On the Beach.
The airline said that OTAs “miss-sell our flights and ancillary services with hidden mark-ups while providing incorrect customer contact information and payment details.”
On allegations that it was preventing OTAs from booking seats for their customers, it responded “this is false – OTAs withold customer payment details from Ryanair and make payments to us with virtual single-use credit cards to prevent customers from seeing the real cost of our flights…. as well as to intercept and control refund payments we make to customers.”
When approached, the CMA did not comment on the specifics of On the Beach’s statement, but 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.”
A spokesperson for the UK Civil Aviation Authority said: “Ensuring passengers’ interests and rights are protected is paramount to allowing choice, value, and fair treatment for existing and future aviation consumers.”
The watchdog said its new consumer strategy report “sets out our vision for the UK to have a competitive aviation market where consumers have access to a choice of services, are informed enough to make the most of the choices available, and have confidence that businesses will meet their obligations if things go wrong.”
Wizz Air and Easyjet did not respond to a request for comment.