With criticism of the lack of action against airlines that breach regulations designed to protect passengers mounting, the government has announced a review of the Civil Aviation Authority (CAA).

Earlier this year the Transport Select Committee said the CAA “urgently requires the power to impose financial penalties on airlines that do not provide complete refunds to consumers when they are required to do so by law”.

There are also concerns about airlines ignoring with impunity European air passengers’ rights rules that are supposed to apply at times of disruption. Some carriers have failed to provide hotels and falsely maintain that passengers whose flights are cancelled cannot switch free of charge to another airline if it is the only way of reaching their destination on the intended day.

Announcing the review, the transport secretary, Grant Shapps, said: “Civil aviation regulation is the linchpin of an industry which pre-pandemic carried millions of passengers every year, contributed £22bn to our economy and supported nearly one million jobs.

“This review will ensure UK civil aviation regulation continues to be world-leading on safety, security, environmental considerations, economic regulation and consumer protection.”

Jeremy Newman, a chartered accountant and independent panel member at the UK’s Competition and Markets Authority, will lead the review.

The chair of the CAA, Sir Stephen Hillier, said: “We welcome the opportunity this review presents to highlight the dedication, skill and continuous learning culture of our organisation, whilst identifying any areas for improvement.

“It will help ensure that we continue to be a diverse, innovative and future-focused regulator, dedicated to improving aviation safety, security and consumer interests, and enabling a thriving aerospace sector.

“We look forward to working in an open, transparent and collaborative way with Government to support this review.”

The government says the review “comes at a crucial time for the aviation industry as it continues its strong recovery from the pandemic”.

UK aviation has slumped since the coronavirus crisis began, with tougher international travel restrictions and more flight cancellations than any other major European nation.

London Heathrow, for decades the busiest airport in Europe, is currently fifth – after Istanbul, Paris, Amsterdam and Frankfurt.

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