Airline cancellation charges: NCLAT seeks CCI response in consumer appeal

The National Company Law Appellate Tribunal (NCLAT) on Monday sought a response from the Competition Commission of India (CCI) on a consumer's appeal challenging the regulator's order dismissing allegations of excessive and unfair air ticket cancellation charges imposed by IndiGo and Air India.

A Delhi bench of the appellate tribunal issued notice to the CCI and posted the matter for further hearing on 19 August.

The appeal has been filed by consumer Kannadiputhur Sundararaman Suresh against the CCI's March 2026 order, which closed his complaint at the preliminary stage after finding no prima facie violation of the Competition Act.

Before the CCI, Suresh alleged that IndiGo and Air India, which together account for more than 90% of India's domestic aviation market, abused their market position by imposing excessive cancellation charges on passengers.

He also argued that the similarity in the cancellation fee structures adopted by the two airlines indicated anti-competitive conduct, amounting to cartelisation under Section 3 and abuse of dominance under Section 4 of the Competition Act.

The complainant cited his own experience, stating that he booked airline tickets worth ₹12,488 but cancelled them shortly after realising that he had selected the wrong travel dates. According to the complaint, he received only ₹3,054 as a refund, with ₹9,434 deducted towards cancellation charges and other fees.

However, the CCI declined to order an investigation.

In its March 2026 order, the regulator observed that there was no evidence of any agreement, arrangement, understanding or concerted practice between IndiGo and Air India to determine or influence cancellation charges. It held that similar pricing policies, by themselves, were insufficient to establish cartelisation under the Competition Act.

The Commission also held that the complaint failed to establish abuse of dominance by either airline individually. It observed that a high combined market share of competing enterprises does not automatically amount to dominance or anti-competitive conduct under the law. Accordingly, the CCI closed the matter under Section 26(2) of the Competition Act, holding that no prima facie case existed to direct an investigation by the Director General.

The NCLAT will now examine whether the CCI was justified in closing the complaint without directing a detailed probe.

The appeal is expected to be closely watched by the aviation industry and consumer groups, as airline cancellation charges have long been a source of passenger complaints. DGCA data for 2025 shows IndiGo accounts for nearly 64% of India's domestic aviation market, while the Air India Group holds around 27%.

Separately, the DGCA introduced revised passenger refund and cancellation rules in February 2026 to improve transparency and consumer protection. Effective from March 2026, the rules provide a 48-hour window for passengers to cancel or modify bookings without additional charges, subject to specified conditions, require airlines to process refunds within 14 working days, and mandate clearer disclosure of cancellation charges.

Emails seeking comments from Air India, IndiGo and the Competition Commission of India (CCI) remained unanswered at the time of publication.