New civil aviation rules to address consumer problems – refunds to become mandatory

New Delhi: As costs of travel begin to rise and consumer frustration with scalping tactics begin to mount, the government has decided to issue new refund rules for domestic airlines. Under the new civil aviation requirement (CAR), carriers will now no longer be able to delay refunds on canceled tickets indefinitely or ask passengers to fly again within a given time.

The proposed rules are part of the new CAR framed by the Directorate General of Civil Aviation (DGCA) and approved by the aviation ministry last week. It is likely to be notified shortly.

Many airlines, especially low-cost carriers, do not issue refunds for cancelled tickets. A cancellation charge is deducted and the balance retained, which the passenger has to adjust by flying with the airline again within a stipulated time frame.

According to the new rules, carriers will have to issue refunds within a week, and also, will not be allowed to exchange refunds for another flight. Now it will also be mandatory for airlines to refund the entire amount of passenger service fee (Rs225), congestion surcharge (Rs150) and fuel surcharge (at present Rs1,950 for short flights and Rs2,350 for others) on ticket cancellation. These charges add up to Rs2,325 for flights below an hour's duration and Rs2,725 for longer ones.

The note accompanying the CAR takes note of consumer complaints, and says, "The issue of refund of tickets by airlines has become a major source of grievance among passengers. A large number of complaints are regularly received... (of) delay in refund of unused ticket, amount refunded and policy of not refunding ticket amount but to adjust that against tickets to be used for future travel in same airline within a limited period of time."

It also says that though the government does not usually interfere in commercial practices, "the volume of complaints necessitates some affirmative action to safeguard the interests of the travelling public."

It adds: "The matter has been discussed in several meetings with airlines (but) with no improvement in the system... It is now considered that the onus rests with the government to fix some minimum benchmarks."

Under the new rules, airlines will have to refund payments made by credit card within seven days of the cancellation. "In case of cash transactions, refunds shall be made immediately by the airline office from where the ticket was purchased," the CAR says.