Manchester-based online travel agency (OTA) On The Beach (OTB) and two associated entities have won over GBP2 million British pounds (USD2.47 million) in a refunds case brought against Ryanair Holdings. The case has set a legal precedent concerning the rights of package holiday organisers to seek refunds from airlines.

The UK High Court's Judge Nigel Cooper handed down his decision on October 31, 2023, in the matter in which On The Beach Limited, Sunshine Co. UK. Limited, and Classic Package Holidays Limited were the plaintiffs, and Ryanair DAC and Ryanair UK (RK, London Stansted) were the defendants. The dispute revolved around Ryanair's refusal to pay the plaintiffs refunds for flights cancelled during the pandemic, which the OTAs had sold tickets on to their clients. Ryanair claimed the OTAs had no legal entitlement to claim the refunds.

"It is very obvious both from what was said in the parties' submissions and from the correspondence within the bundles that this litigation is part of a much wider dispute between Ryanair and On The Beach Group (and apparently other on-line travel agents) as to the extent to which on-line travel agents may book flights operated by Ryanair," Cooper's ruling reads. "That dispute involves other litigation both in the High Court and elsewhere and has been going on for a substantial period of time, certainly in excess of ten years."

The OTAs claimed and won a total of GBP2,074,674 (USD2,567,897) for the flight component of package holidays sold by them in which they booked a Ryanair flight on a client's behalf, with the OTA paying Ryanair, but the airline later cancelling or making a major change to the flight time. When this happened, Ryanair offered their passengers a refund, and the OTAs paid this out to their clients, but Ryanair refused to refund the OTAs. Ryanair's counsel raised several objections to On The Beach's case, which primarily revolved around the airline's refusal to accept that OTAs are legitimate agents acting on behalf of their clients. Cooper found that they were.

"I am satisfied that there is no realistic prospect of challenging whether OTB Group companies were acting as agents of travellers who were offered refunds by Ryanair," the judgement reads. "All the flight bookings are made in the name of the traveller and OTB Group booking conditions expressly state that the relevant company acts as the traveller's agent when booking flights."

Fox Williams, representing On The Beach, said they relied on regulation 29 of the Package Travel Regulations 2018, which provides a “right to redress” for package organisers against third parties that cause them loss, 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 a statement, Fox Williams said the ruling has clarified the law and is expected to pave the way for similar claims in the future. "The High Court clarified an important aspect of the Package Travel Regulations, which (to some) had been uncertain: whether regulation 29 created a freestanding legal right for the package organiser to recover from third parties which cause it loss. The court has clearly decided that it does."

Shaun Morton, Chief Executive of On the Beach, welcomed the judgement. "We continue to call on the CMA to review the anti-competitive behaviour by certain low-cost airlines, protecting consumer choice with fair access to flights and a code of conduct for airlines and travel agents," he said. "It has taken a protracted and expensive legal process to reach today's outcome, which could and should have been avoided." On The Beach advises that it intends to apply for costs.