In a significant relief to fliers, the Directorate General of Civil Aviation (DGCA) has capped ticket cancellation charges and barred airlines from levying additional amount for refund process.
The new cancellation rules are effective from August 1 to ensure more transparency. This is along with the issuance of revised Civil Aviation Requirement (CAR) by DGCA chief M Sathiyavathy. The key points are :
- Airlines cannot levy cancellation charges of more than the basic fare plus fuel surcharge.
- Airlines have also been mandated to refund all statutory taxes and user development fee (UDF)/airport development fee (ADF)/passenger service fee (PSF) to the passengers in case of “cancellation/non-utilisation of tickets or no show”.
- This provision (of refunding statutory taxes) shall also be applicable for all types of fares offered including promos/special fares and where the basic fare is non-refundable.
- Airlines have been barred from imposing refund processing fee, which is generally Rs 200 per ticket for most airlines on domestic sector.
- Airlines would also be required to indicate in an unambiguous manner the refund amount in case of cancellations. The amount and its break-up may be indicated on the ticket itself or through separate form used for the purpose.
- The policy and amount of refund shall be displayed by the airlines on their respective websites.
- Airline shall not levy any additional charge for correction in name of the same person, when error in his name spelling is pointed out by the passenger to the airline after booking of his ticket.
- For tickets booked through travel agents or portal, the onus of refund would be on the airlines and the refund has to be completed within 30 days.
- Passengers can choose whether the refund money should be kept in the airline’s credit shell or not. The option of holding the refund amount in credit shell by the airlines shall be the prerogative of the passenger and not a default practice of the airline.
As per the current rules, airlines were required to refund only PSF collected by them in case of cancellation.
The move might trigger a legal recourse as the airlines had strongly opposed it.
“We believe this will not be a legally tenable proposition because this will be a contract between a travel agent and passenger,” SpiceJet Chairman and Managing Director Ajay Singh had said last month.
Presently, SpiceJet levies a fee of Rs 2,250 per passenger per sector per change for any change/cancellation; IndiGo also levies charges of Rs 2,250 for any change/cancellation up to 2 hours before scheduled departure and more than 4 hours for international flights.
These cancellation charges are now set to reduce to the level of base fare plus fuel surcharge and the airlines will have to refund all statutory taxes. Earlier, the Ministry of Civil Aviation had proposed that airlines’ cancellation charges be at the base fare, but in final rules the carriers can also deduct fuel surcharge.
The move will enable airlines to charge up to Rs 400-500 extra for a cancelled ticket. However, the cancellation charges will still be considerably less than the present fee levied by both airlines and travel agents. This is, indeed, a welcome relief for the flier !