THOUSANDS of Ryanair passengers could be in line for compensation as the aviation regulator has today launched legal action against the airline for refusing to payout claims.

Under EU rules, passengers flying from an EU airport or to an EU airport on an EU-based airline, can claim compensation if a flight is delayed for more than three hours or cancelled - and it's the airline's fault.

Payouts are worth up to €250 (£229) for short-haul flights, up to €400 (£367) for mid-haul flights, and up to €600 (£530) for long-haul flights.

But Ryanair has been refusing to pay compensation to the some 100,000 passengers affected after a series of flights were cancelled or delayed over the summer.

The airline was hit by widespread pilot and cabin crew strikes after staff walked out for 48 hours in a dispute over pay, working conditions and pensions.

But the Civil Aviation Authority (CAA) says the strikes were not "extraordinary circumstances", which means the airline has to pay out to affected passengers.

In order to force Ryanair to pay-up, the CAA has today launched legal action against the low-cost airline.

The watchdog says thousands of passengers are entitled to some kind of compensation under EU law.

The CAA said: "The UK Civil Aviation Authority has today started enforcement action against Ryanair, following the airline's decision that financial compensation is not payable under European Commission Regulation 261/2004 for flight disruption resulting from industrial action by the airline's staff this summer.

"Ryanair passengers have made claims for compensation directly to the airline, but these have been rejected.

"Passengers have then been able to escalate their complaints to AviationADR, a body approved by the Civil Aviation Authority, to provide alternative dispute resolution for passenger complaints.

"Ryanair has now informed the Civil Aviation Authority that it has terminated its agreement with AviationADR.

"As the Civil Aviation Authority said at the time of the industrial action, in its view, the strikes were not 'extraordinary circumstances' and were not exempt, meaning consumers should be compensated in accordance with Regulation EC261/2004.

"As a result of Ryanair's action, passengers with an existing claim will now have to await the outcome of the Civil Aviation Authority's enforcement action."

Rory Boland, Which? travel editor, said: “Customers would have been outraged that Ryanair attempted to shirk its responsibilities by refusing to pay out compensation for cancelling services during the summer – which left hard-working families stranded with holiday plans stalled.

"It is right that the CAA is now taking legal action against Ryanair on the basis that such strikes were not “extraordinary circumstances” and should not be exempt, to ensure that the airline must finally do the right thing by its customers and pay the compensation owed."

Megan French, consumer expert at MoneySavingExpert.com, added: “While it is good news that the regulator has stepped up to take action against Ryanair, it is outrageous that the airline has refused to pay compensation for delays caused by its own staff striking.

“It remains to be seen what will happen next, but passengers must not be put off from filing a claim if they believe they are owed compensation.”

A Ryanair spokesperson said: “Courts in Germany, Spain and Italy have already ruled that strikes are an “extraordinary circumstance” and EU261 compensation does not apply.

"We expect the UK CAA and Courts will follow this precedent.”

But Ryanair isn't the only provider to be scrimping on payouts - other holiday firms are also cheating passengers out of millions in delay compensation while paying out to others who were on the same plane.