India: get ready for reduced air travel charges

The Civil Aviation minister of India announced some far ranging changes in the way airlines will do business in India going forward. While some of it is already in effect, more is on its way. Yesterday, in a press conference, the minister made a whole lot of announcements. While some of these are going to be implemented right away, some others will come in force after consultation with the stakeholders (read airlines and airports, amongst others).

Domestic Refunds within 3 weeks, International within 6 weeks. Cash or credit is your choice not the airline’s

While most airlines I deal with, such as Jet Airways, already do a good job of processing refunds in time, it seems there were others who were not doing it right. When you purchased tickets from a travel agent or an OTA, you were left fighting the OTA for your money back. This was happening a lot in the Kingfisher days when the airline shut shop and the passengers in many a cases never even got their money back. As per the new rules:

In case of purchase of ticket through a travel agent/portal, the onus of refund lies with the airline as agents are appointed representatives of the airlines. The refund process shall be completed within 15 working days in case of domestic travel and 30 working days in case of international travel.

Also, while earlier the airlines defaulted to retaining your money for future travel, now, it has to be your choice every time

The option of holding the refund amount in a credit shell by the airline shall be the prerogative of the passenger and not the default practice of the airline

Also, foreign airlines would be subject to the regulations of their own country

Foreign carriers operating to/from India shall refund the tickets in accordance with the regulations of their country of origin. The mode of refund shall be as per the provisions of the CAR

All your statutory charges come back to you in case you are unable to travel

In the current provisions, only your passenger service fee had to come back to you, since perhaps these rules were written in the days when all airports were run by AAI and only Passenger Service Fee was charged. In today’s date,

All statutory taxes and fees (UDF/ADF/PSF) are to be refunded to the passenger in the case of non-use or cancellation of the ticket.

Also, in case of promo and special fares, you still get your money back.

Return of taxes and fee shall be applicable for all types of fares offered by airline including promo/special fares and where the basic fare is non-refundable.

In no circumstances the cancellation charge shall be more than the basic fare

Airlines can’t charge you extra to process a refund

Apparently some airlines used to charge extra to have you get your money back. While I’ve never seen this happen, apparently Indigo was using this practice. No more.

Airlines shall not levy any additional charges to process the refund.

Airlines to pay you for not putting you on the flight

In case the airline did not put you the flight, due to cancellation or overbooking, earlier, they were due to pay you INR 2000 or value of ticket (For flights upto 1 hour)/ INR 3000 or value of ticket (for flights between 1 and 2 hours)/ INR 4000 or value of ticket (for flights over 2 hours block time).

Now, this would change. If they put you on another flight scheduled to depart within 1 hour of original flight time, you don’t get any compensation. However, if you have to depart within 24 hours of your original booking time due to the airline, you get 200% of the original ticket price (base fare + fuel surcharge), subject to a maximum of INR 10,000. If they can’t put you on a plane within 24 hours, then apart from the flight, you get 400% of the original ticket price (base fare + fuel surcharge), up to a maximum of INR 20,000. If you choose not to take the alternate flight, you get 400% of the original ticket price (base fare + fuel surcharge) and a full refund of the ticket value.

Airlines cancel your flight, here is when you get paid

When your flight gets cancelled, if the airline informs you 2 weeks ahead and they get you another flight on another day, they don’t need to pay you. When they cancel a flight within 2 weeks and up to 24 hours of scheduled departure times, the airline needs to get you another flight within 2 hours of scheduled time of departure. If the flight is cancelled beyond these timelines, the following gets due, beyond your ticket:

  • INR 5,000 or booked one-way basic fare plus airline fuel charge, whichever is less for flights having a block time of upto and including 01 hour
  • INR 7,500 or booked one-way basic fare plus airline fuel charge, whichever is less for flights having block time of more than 01 hour and upto and including 02 hours.
  • INR 10,000 or booked one-way basic fare plus airline fuel charge, whichever is less for flights having a block time of more than 02 hours

You can carry bags for less

Back in the day, when fare unbundling happened, airlines decided to charge for everything. Also, tacitly the amount of luggage you could carry came down to 15 Kgs from 20 Kg. Now, the ministry thinks, that for the first 5 kilos after 15 kgs, the airlines need to charge only INR 100 per kg, and thereafter they can charge what they deem fit. This is to accommodate the cases where people travel heavy but do not realize the weight they carry.

Bottomline

The proposals are still work in progress, and hope to be implemented in a month or so. However, some airlines have already started following the proposals as it is a deemed policy now. I had to cancel some last minute travel yesterday, and a certain airline I love refunded me all the taxes.

I do agree with the proposals being consumer friendly, and I am happy for myself and all of you, but somewhere I think the ministry is going to go too far to interfere in the commercials of the airline industry which they should not. For instance, if they decide to cap fares for 1 hour flights at INR 2500, then you maybe won’t get it for lesser at INR 1900 (BOM-GOI) which was selling last week.

Readers, do you like all the changes which will be policy soon?

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About Ajay Awtaney

Ajay is a financial services pro, working to bring order to the chaos of the financial industry on an everyday basis! Beyond that, he dons the hat of India's favourite frequent traveller, trying to help people elevate their travel experience via tips and tricks they never knew before, or introduce them to the world of miles and points. Armed with an MBA from MDI Gurgaon and graduate degree in computer science from the University of Delhi, Ajay brings a systematic and objective approach on the table for his audience in dissecting travel and loyalty programs in India and around the world, and how to benefit from them. Ajay has been quoted in various reputed traditional and online media including The Hindustan Times, Inside Flyer, Bloomberg, DNA India, Conde Nast Traveller, The Telegraph, Mumbai Mirror, Mint, MoneyLife and The USA Today.

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Comments

  1. this is good, had a seriously horrendous experience with spicejet yesterday, wife & 6 year old kid stranded on mumbai airport @ 4.30 in morning as they cancelled flight & refused alternate flight arrangement or accommodation. need to file for complaint to consumer court now after i get money back from Cleartrip who is charging me for cancellation, what can i say it is a difficult world for us mortals when agasint big flight companies.

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