Low-cost airlines IndiGo and AirAsia India have started refunding money to travel agencies for tickets booked post March 25 for travel till May 3, Nishant Pitti, Chief Executive Officer and co-founder, EaseMyTrip.Com said on Tuesday. India went into a lockdown from March 25 which is expected to last till May 3.
“Indigo and AirAsia India are refunding money in our agency wallet and we are refunding to customers who have booked tickets post March 25 (for) travel till May 3,” Pitti told BusinessLine, adding that the refund process started on Tuesday.
Sources in IndiGo confirmed the development while AirAsia had not confirmed the details at the time of going to press. IndiGo is the domestic market leader with a market share of a little under 50 per cent.
Explaining the procedure, Pitti said that for low-cost airlines like IndiGo, SpiceJet GoAir and AirAsia, agencies like EaseMyTrip need to deposit money in advance for booking tickets. “We can book tickets only worth our wallet balance with airlines… It is like an advance we have to keep with airlines to book tickets. Once the advance is exhausted, we have to refill that wallet to keep booking tickets,” he said.
In case of refunds, airlines refund money in that wallet which can be used for booking fresh tickets. “But to customers, we are refunding money in their bank accounts,” Pitti claimed.
It was not immediately clear as to whether airlines were refunding the tickets booked on their websites during this period as well.
However, full service airlines like Vistara and Air India follow a different business model and therefore the question of these airlines transferring money back to travel agents or online travel agents does not arise, industry watchers say.
The issue of taking bookings and operating flights came to the forefront as the government decided to implement an all India lockdown which was initially till midnight April 14.
Some domestic airlines started taking bookings post April 15. Eventually, the Ministry of Civil Aviation directed them not to take any bookings till May 4 and refund the money of the passengers who had booked tickets post April 15. The Ministry said that there should be no bookings till May 4 as the all-India lockdown had been extended till midnight May 3.
On April 18, Hardeep Puri, the Minister of Civil Aviation tweeted advising the airlines to open their bookings only after a decision had been taken by the government on when flights will resume. This, however, did not stop the private airlines from taking bookings till the DGCA circular was issued.
Incidentally, Air India stopped taking bookings on April 18, shortly after Puri’s tweet.