On The Beach (LON:OTB) is suing Ryanair (LON:RYA)
The online package holiday dealer On The Beach (LSE:OTB) has begun pursuing legal action against Ryanair (LSE:RYA). The firm filed a claim in the UK High Court accusing the budget airline of blocking it from booking passenger seats on flights, forcing customers to book directly and pay potentially higher fees.
What’s Ryanair up to?
Ryanair has a history of tension with third-party flight bookers. The firm generates a large chunk of its income from selling additional services like hotel bookings and priority boarding. If a ticket is booked through a package holiday dealer rather than directly, the company looses the opportunity to further monetise its passengers. This is likely one of the primary reasons the group encourages people to avoid online travel agents entirely.
Ryanair has also previously accused online travel agents of using fake information and virtual credit cards to complete its bookings. This allegation has been vehemently denied by On The Beach in its new lawsuit. It also states that Ryanair is abusing its dominant position in the short-haul flight market. Beyond blocking bookings, the firm claims that Ryanair has failed to provide refunds for cancelled flights during the pandemic. This has triggered the travel agent to suffer a £48.7m loss that it calls “unlawful”.
Ryanair has yet to present its side of the argument and hasn’t commented on any of the accusations made by On The Beach.
Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended On The Beach. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.