The probe will examine situations where airlines continued to operate flights despite people being unable to lawfully travel for non-essential purposes, such as during England’s second national lockdown in November.
The authority said it was aware that in some cases where flights were not cancelled, passengers were still not offered refunds even though they couldn’t travel and were instead offer the option to rebook or a voucher.
"The CMA recognises the airlines sector, like many others, is under strain due to the pandemic," said the authority in a statement issued on Wednesday (16 December).
"However, it is concerned certain airlines may have breached consumers’ legal rights by failing to offer cash refunds, leaving people unfairly out of pocket, and has therefore opened an investigation to examine the matter further."
The investigation comes as part of ongoing work by the CMA relating to holiday refunds during the Covid crisis.
Chief executive Andrea Coscelli said: "We will be carefully analysing all the evidence to see whether any airlines breached consumers’ legal rights by refusing people cash refunds for flights they could not lawfully take.
"We recognise the continued pressure that businesses are currently facing, but they have a responsibility to treat consumers fairly and abide by their legal obligations."
The CMA has pledged to work closely with the CAA during the investigation, which has undertaken its own work on airline refunds.
"While CAA leads on consumer protection in the airline sector, the CMA has undertaken extensive action in connection with cancellations and refunds during the pandemic and is well placed to support the CAA on these issues," said the CMA.
"The CMA and the CAA continue to work closely and share the same enforcement powers to tackle breaches of consumer protection law.
"The CMA will now be writing to a number of airlines requiring information to understand more about their approaches to refunds for consumers prevented from flying by lockdown."
On the basis of evidence gathered during the probe, the CMA will then decide whether to take enforcement action against any airlines.
