Airlines to make full refund of tickets booked during lockdown period: DGCA proposes in SC

"If the tickets have been booked during the first lockdown period, that is March 25, to April 14, 2020 for the journeys to be undertaken in both first and second lockdown period that is from March 25 to May 3, 2020, in all such cases, full refund ...

New Delhi: Full refund shall be provided by airlines immediately for tickets booked during the COVID-19 lockdow for domestic or international travel within the lockdown period, civil aviation regulator DGCA has proposed in the Supreme Court. For all other cases, the airlines shall make all endeavors to refund the collected amount to the passenger within 15 days, the Director General of Civil Aviation said in an affidavit filed in the top court.

"If the tickets have been booked during the first lockdown period, that is March 25, to April 14, 2020 for the journeys to be undertaken in both first and second lockdown period that is from March 25 to May 3, 2020, in all such cases, full refund shall be given by the airlines immediately (this is being mandated vide MoCA's OM dated April 16, 2020 as the airlines were not supposed to book such tickets)," it said.

The DGCA said that after various rounds of deliberations between the stakeholders including the airlines, they have arrived at a proposed workable solution keeping in view the interests of both passengers as well as companies.


On June 12, the top court, while hearing a PIL filed by NGO 'Pravasi Legal Cell', had asked the Centre, the DGCA and the airlines to discuss and work out modalities for full refund of tickets for domestic and international flights which were cancelled following the COVID-19 lockdown.

The aviation regulator in its affidavit said that if airlines are not able to refund the amount on account of financial distress, they shall provide a credit shell equal to the amount of fare collected and this shall be issued in the name of the passenger who has booked the ticket for domestic travel directly or through an agent including online platforms.

It said the passenger shall be able to consume the credit shell up to March 31, 2021 on any route of his choice and If the passenger wants to buy a ticket of value more than the credit shell, then he can use cash to top it up.
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"If he wants to buy a ticket of value less than the credit shell, he/she can do so and the balance amount of credit shell shall be available to him/her," it said, adding, there shall be an incentive mechanism to compensate the passenger if there is a delay in consuming the credit shell.

It said, "From the date of cancellation of ticket up to June 30, 2020 the value of 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 credit shell shall be enhanced by 0.75 per cent of the face value per month, up to March 2021."

The regulator also proposed the credit shell shall be transferable and to any person, and the airlines shall honour such a transfer.

"The airlines shall devise a mechanism to facilitate such a transfer", it said, adding that by the end of March, 2021, the Airlines shall refund cash to the holder of the credit shell.
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The DGCA said that the airlines shall also refund the full amount in case of travellers who have since expired to the account of the passenger or to his representative.

Similarly, a proposal was made by the DGCA for refund of tickets for passengers who have booked tickets for international travel through Indian carrier or foreign carrier during the lockdown period.
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The aviation regulator said the existing legal regime which is governed by Civil Aviation Requirements (CAR) recognises the rights of air passengers to seek refund of their air tickets.

It further said that during the lockdown travel restrictions, some passengers reported that airlines have booked tickets during lockdown and are not refunding the fares.

"It is submitted that to address this peculiar situation, the Ministry of Civil Aviation (MoCA) issued an Order dated April 16, 2020 providing for refund of fares of those tickets which were booked during the lockdown period, that is from March 25, to April 14, for the journeys to be undertaken in both first and second lockdown that is from March 25 to May 3, 2020," the DGCA said.

Referring to the discussions held by representatives of the airline companies, the DGCA said that they have submitted that on account of cancelation of flights/complete suspension of operation due to COVID-19 pandemic situation, the airlines have run out of liquidity or are facing an acute liquidity crisis.

The regulator said, considering the concerns highlighted by the airlines, any enforcement action initiated by the DGCA, for violation of provisions of CARs, can result in reduction/suspension of approved schedule of the airline which are already operating to their limited capacity.

On June 12, the top court had asked the Centre to take a stand on the issue and work out ways for full refund.

The plea by NGO had urged the court to declare the alleged action of airlines of not refunding the entire value of cancelled air tickets as violative of civil aviation requirement issued by the authority.
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