Airlines must refund ticket in 7 days: Govt

22 May 2008, Saurabh Sinha, TNN

NEW DELHI: Domestic airlines will no longer be able to hold passengers who cancel their tickets to ransom by delaying refunds indefinitely or by asking them to fly again instead within a given time.

Acting on complaints, the government is set to issue new refund rules: airlines will have to issue refunds within a week and cannot swap refund for another flight.

Better still, the new rules make it mandatory for airlines to refund the entire amount of passenger service fee (Rs 225), congestion surcharge (Rs 150) and fuel surcharge (at present Rs 1,950 for short flights and Rs 2,350 for others) on ticket cancellation.

Because these three alone add up to Rs 2,325 for flights below an hour’s duration and Rs 2,725 for others, many low-cost carriers have been advertising basic fares of Re 1, Rs 3, Rs 99 or even zero to give the impression that their fares are low and it is taxes and surcharge that have made flying expensive.

Once the new refund rules come into play, these carriers may be forced to come clean on their pricing strategy and offer basic fares that give them leverage to hold back some cancellation amount.

The proposed rules are part of the new civil aviation requirement (CAR) framed by the Directorate General of Civil Aviation and approved by the aviation ministry last week. DGCA is likely to notify these shortly.

The CAR takes note of passengers’ long standing woes. “The issue of refund of tickets by airlines has become a major source of grievance among passengers. A large number of complaints are regularly received… (of) delay in refund of unused ticket, amount refunded and policy of not refunding ticket amount but to adjust that against tickets to be used for future travel in same airline within a limited period of time,” it says.

The CAR severely indicts airlines, saying that though the government does not usually interfere in their commercial practices, “the volume of complaints necessitates some affirmative action to safeguard the interests of the travelling public.”

It adds: “The matter has been discussed in several meetings with airlines (but) with no improvement in the system… It is now considered that the onus rests with the government to fix some minimum benchmarks.”

Under these new benchmarks, airlines will have to make refunds for payments made by credit card within seven days of the cancellation. “In case of cash transactions, refunds shall be made immediately by the airline office from where the ticket was purchased,” the CAR says.

Many airlines, especially low-cost ones, do not issue refunds for cancelled tickets. They deduct a cancellation charge and retain the balance which can be adjusted by the passenger for flying with the airline again within a certain time.

“This is a patently consumer-unfriendly move that we want to correct,” said a senior official. The government consulted refund rules of several countries before coming out with its own stringent draft of rules.

Source : The Times of India

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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