E-Paper
SC nod to govt plan to refund air tickets
New Delhi
New Delhi
The saga of airline ticket refunds finally came to an end on Thursday with the Supreme Court signing off on the Central government’s proposal of airlines refunding money within three weeks for air tickets booked during the lockdown, and either within 15 days or through passenger credit till March 31 next year for tickets booked before the lockdown.
The move ends months of uncertainty for passengers who saw the flights on which they booked tickets being cancelled on account of the lockdown imposed to fight the coronavirus disease. Scheduled air services restarted in India only on May 25.
This formulation, proposed by the Directorate General of Civil Aviation (DGCA) after consultation with airlines and travel agents, was largely accepted by all stakeholders, in view of the unprecedented situation created by the pandemic.
Accepting the suggestions of the DGCA in entirety, a three-judge bench comprising justices Ashok Bhushan, R Subhash Reddy, and MR Shah said, ‘’Strict enforcement of Civil Aviation Requirements (CAR) at this moment (that required immediate refund of tickets) may not yield any meaningful result for any stakeholder. We also feel that such formulations (framed by DGCA and Ministry of Civil Aviation) are workable solutions in these peculiar circumstances which are prevailing in the country.”
According to the order, if a passenger booked a ticket during the lockdown (from March 25 to May 24) for domestic or international travel during this period, he/she shall be entitled to full refund (without cancellation charges) to be made by the airline (Indian and foreign carrier) within three weeks from the date of cancellation. In cases where the ticket was booked through a travel agent, this money will be routed to the passenger through the agent. For international travel, the court dealt only with ex-India flights (originating from India) although during the hearing of the petitions, DGCA accepted that the benefit of refund will be available on flights originating outside the country provided the ticket was booked in India.
For tickets booked prior to the lockdown period, the court asked airlines to “make all endeavours” to refund the collected amount to the passenger within 15 days beginning Thursday. “If on account of financial distress, any airline(s) are not able to do so, they shall provide credit shell, equal to the amount of fare collected, in the name of passenger when the booking is done either directly or through travel agent, so as to consume the same on or before March 31, 2021,” the order said.
The order came on a petition filed by passengers represented through Pravasi Legal Cell and Air Passengers Association. The Federation of Travel Agents filed a separate petition demanding that the “credit shell” should be issued in the name of the agent as in several cases passengers were yet to pay for the tickets. DGCA objected to this suggestion as it recognised only the relationship between an airline and the passenger. The bench resolved the situation by directing that the passenger be free to transfer the shell to any person, including the travel agent.
Airlines such as IndiGo, SpiceJet, GoAir, Vistara and AirAsia were represented in the matter through their respective counsel. While most airlines were satisfied by the DGCA’s formulation, GoAir requested the court to extend the shell period till March 31, 2022 because airlines have been hit hard by the pandemic . The airline cited a report by the International Air Transport Association (IATA) which showed 2020 as the worst year in the history of airlines with net losses of $84.3 billion posing a risk to 32 million jobs worldwide.
The bench was not inclined to extend the period. Justice Reddy, writing the judgment for the bench, said, “We are not inclined to accept the same keeping in mind that the passengers who, with the hope of travel, have booked their tickets by spending their own money.”
Vistara and AirAsia objected to the interest on the credit. According to DGCA, the airline will pay 0.5% interest from the date of cancellation till June 30 this year and thereafter 0.75% per month till March 31, 2021.
Arvind Datar, lawyer for Go Air, responding to the DGCA’s scheme, said, “In two months we have disbursed Rs 40 crore refund and have to repay Rs 266 crore. Our flights are operating at 60% strength, prices have been capped, fuel charges have increased and we have to pay salaries to our workforce. From today, the deadline to make full refund expires in six months.”
