Home / Companies / News /  Flight ticket cancellations, refunds now made easy

New Delhi: Air travellers will be able to cancel or amend flight tickets without any charges within 24 hours of booking if the travel date is at least a week away, according to the passenger rights charter announced by the government on Wednesday.

The final charter, released by civil aviation minister Suresh Prabhu after nine months of consultation with airlines, also mandates carriers to compensate passengers in addition to refunding ticket cost in full or to provide alternate flights acceptable to passengers when they are not intimated about flight cancellations at least a day before.

The compensation will be in the range of 5,000-10,000 depending on the travel time or one-way base fare plus airline fuel charge, whichever is less.

When flight cancellations are intimated to passengers closer to travel date but at least a day before departure, the airline has to offer an alternate flight or refund as per the traveller’s preference.

The charter seeks to articulate the rights of passengers and responsibilities of carriers for their mutual benefit, Suresh Prabhu said. “Over a period of time, airlines will realize that making passenger rights a reality will help them," he said.

The aviation policy framework should address both macro issues of the sector, as well as micro operational matters, the minister said. Airlines that suffer a high cost burden when oil prices soar or when the rupee depreciates may, however, find that some of the proposals in the charter put an extra burden on their costs.

The charter says airlines have to offer alternate flights or full refund when there is a flight delay of more than six hours. Passengers have to be told about such delays at least 24 hours in advance. Also, free hotel accommodation has to be given when there is a delay of 24 hours or more from the departure time communicated a day ago or when there is a delay of six hours in cases where the scheduled departure was between 8pm and 3am.

The charter also requires airlines to meet transportation expenses when a passenger is to board from or go to a different airport or terminal without a six-hour notice.

The move is likely to improve the performance standards of India’s aviation sector, which is projected to be the third largest in the world by 2025 after the US and China.

The charter, a milestone for the aviation industry amid a phenomenal 19% annual growth in the last four years, comes at a time when most airlines are working at 85-90% capacity and the government is working to improve infrastructure to facilitate growth and regional connectivity.

Industry watchers said airlines have been getting ancillary revenue from cancellation charges but the revenue impact on account of free cancellations immediately after booking may not be significant.

“Cancellation of air tickets tend to happen more towards the date of travel rather than immediately after booking. Therefore, the impact on airline revenue may not be much," said Kinjal Shah, vice-president and co-head (corporate sector ratings) at Icra.

The charter says airlines are not liable to pay compensation if delays or cancellation are on account of factors beyond its control (force majure).


Gireesh Chandra Prasad

Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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