Economy

SC order on air ticket refund fair to flyers and airlines: Experts

Our Bureau New Delhi | Updated on October 01, 2020 Published on October 01, 2020

How will passengers be refunded if airlines close down due to the pandemic: CAPA India

A Supreme Court order on refund for air tickets booked during the Covid lockdown period (March 25 to May 24) does not protect passenger interests totally, according to Kapil Kaul, Chief Executive, Centre for Asia Pacific Aviation (CAPA) India. However, some industry experts said the order is fair to both the flyer and the airline.

In its order of Thursday, the Supreme Court directed that if a passenger had booked an air ticket during the lockdown period (March 25 to May 24) for travel during the lockdown period and the airline had received payment for both domestic and international air travel and the passenger was seeking a refund, the airline has to refund the full amount collected without any cancellation charges within three weeks from the date of cancellation.

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The order further adds that “for international travel when the tickets have been booked on an Indian carrier and the booking is ex-India, if the tickets have been booked during the lockdown period for travel within the lockdown period, immediate refund shall be made.”

“If the tickets are booked for international travel on a foreign carrier and the booking is ex-India during the lockdown period for travel within the lockdown period, full refund shall be given by the airlines and said amount shall be passed on immediately by the agent to the passengers, wherever such tickets are booked through agents. In all other cases airline shall refund the collected amount to the passenger within a period of three weeks,” the order states.

Credit shell

The Supreme Court order further says that in cases where a credit shell is issued there will be an incentive to compensate passengers from the date of cancellation up to June 30, 2020, in which event the credit shell shall be enhanced by 0.5 per cent of the face value (the amount of fare collected) for every month or part thereof between the date of cancellation and June 30, 2020. Thereafter the value of the credit shell will enhanced by 0.75 per cent of the face value per month up to March 31, 2021.

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Pointing out that the order is on expected lines, Kaul said he is not sure how the passengers who have booked tickets will be refunded if airlines close down due to the pandemic.

He further said the closure of Jet Airways and Kingfisher airlines resulted in losses of a few thousand crores of rupees for the passengers.

A Vistara spokesperson said that the airline was providing flexibility through ticket credit prior to the ruling, adding that the airline will comply with the decision as needed.

‘Move in right direction’

Taking a different view, Nishant Pitti, Chief Executive Officer and co-founder of EaseMyTrip.com, said: “The judgment is a move in the right direction where both airlines and customers have been taken into consideration. The move supports the airlines by giving them the required cushion till March 31 and at the same time supports passengers by an ensuring interest on the credit shell.”

Agreeing with Pitti, Petrushka Dasgupta, Partner at IndusLaw, said: “The Supreme Court’s well-timed order accepting the DGCA’s recommendations is a major relief for cash strapped airlines reeling under financial pressure due to the pandemic. This opportune intervention will help the airlines in saving their dwindling cash reserves and enable them to provide effective services to the flyers.”

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Published on October 01, 2020
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