New Delhi:The draft passenger rights charter released by the government on Tuesday prescribing steep penalties on airlines for poor service is set to raise the performance standards of India’s aviation sector projected to be the third largest in the world by 2025 after the US and China.
The proposed charter, a key milestone in the sector’s evolution amid a phenomenal 19% annual growth in the last four years, comes at a time most airlines are working at 85-90% of their capacity and the government is making an all out effort to improve infrastructure to facilitate future growth as well as regional connectivity.
“After ensuring that irate passengers do not turn unruly, the draft passenger charter which is being developed, will enforce performance standards on airlines with hefty penalties for flight cancellation (other than force majure) and lost baggage among other things. Airlines are contesting this, claiming that such penalties are not there worldwide and would add to costs," said a government official, who asked not to be named. The draft charter is open to public consultation for a month and the civil aviation ministry plans to implement it in about two months.
“Airlines are expected to factor in the new regime of customer rights in their pricing but over a period of time, with enhanced efficiency and higher traffic, its effect on prices will wane," said an industry observer, who spoke on condition of anonymity. Domestic airlines are at present on a massive capacity expansion programme with close to 130 new aircraft inductions expected in FY2019.
Industry observers said the draft guidelines will likely result in a seamless and safe experience to passengers, though at a cost. “Since this calls for levying penalties on airlines and requires airlines to make investments in providing various services laid down, it will increase the costs for airlines. This may be passed on to the passengers by way of an increase in fares since the airlines are already heavily burdened with the fuel price increase," said Kinjal Shah, vice president, corporate ratings at rating agency ICRA.
The key passenger rights proposed include full refund on cancellation or modification of tickets within 24 hours of booking, option of full refund for flight delayed beyond four hours, hotel accommodation if delay is more than 24 hours and compensation ranging from ₹ 5,000-20,000 for missing connecting flights due to flight delays. The draft charter also proposes that the limit of liability of airline to pay in case of injury on-board or loss of luggage has to be same for domestic and international flights. These proposals may undergo some changes during public consultation as airlines explore ways of keeping their costs optimum at a time high fuel price is a drag on profits.
“The option to reschedule or cancel tickets without charges is being proposed only for the limited 24 hour window after booking as we have to balance customer rights with airlines’ business constraints," said a second official, who also spoke on condition of anonymity.
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