New ticket cancellation rules w.e.f. August 1

The Indian aviation regulator, DGCA has come out with some new rules about cancellation of tickets which are issued in India, and these will be valid from August 1, 2016. While the airlines protested the move as this was deemed to be a more commercial aspect of running an airline, the regulator has pressed ahead, stating that airlines have no right to make cancellations a revenue stream in itself. They open their regulations by saying:

The issue of refund of tickets by airlines has become a major source of grievance amongst airline passengers.

So, the regulator and ministry decided to jump in, and while they state that this is not their business, they are popping in to set guidelines because airlines are not working by being nudged. I am not sure how true that is, because apart from a couple of cases, I almost always get my refunds on time.


Anyhow, new regulations have been put out last night, which will be applicable from August 1, 2016. Here is the entire set, but for the benefit of our readers, we post the summary here as well.

Timeline of refund

The following timelines are defined:

  • In case of credit card payments (directly with the airline), refund to be given within seven days of the cancellation to the account of credit card holder.
  • In case of cash transactions, refund shall be made immediately by the airlines office from where the ticket was purchased.
  • In case of purchase of ticket through travel agent/portal, onus of refund shall lie with the airlines. The airlines shall ensure that the refund process is completed within 30 working days.

Amount of refund

Even when you purchase a sale fare, which may be non-refundable in nature, you are paying the airport use charges and government taxes as a part of the ticket. When you don’t fly, you don’t use the airport and the government does not get paid. Hence, now it is mandatory that airlines shall 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/no show. This provision shall also be applicable for all types of fares offered including promos/special fares and where the basic fare is non-refundable.

Also, now onwards, the airlines need to spell out the amount of refund (if cancelled/no-show) on the ticket issued itself, rather than one needing to find out in a hard manner. Also, the airlines need to display cancellation policies prominently on their website and not in the fine print.

Also, airlines can’t charge you an extra amount to process the refund. Apparently this was the case with a prominent Indian airline.

Mode of refund

Some airlines, Indigo comes to mind specifically, don’t send the money back your way by default. Instead, they hold it in a credit shell for your convenience. Meh! This is actually a sad practice, where the airline is hoping you forget about the money later and they never have to give it back to you. So, now the regulations need airlines to proactively offer you the options rather than them deciding for you that they want to retain the money for your use later.

Change of name

Apparently, change of name costs money, not! But the airlines still used to charge for it. Some airlines are okay with it. For instance, a couple of times my dad got his tickets booked by someone else, and they put the wrong name on his Jet Airways tickets, however, he still got to travel. Others are more stiff about it. So, now no one can charge for an error in the name (the way it is spelt!). By the way, you can correct ticket spelling errors online on Jet Airways.

Who is it applicable to

All the Indian airlines for sure. For international airlines operating in India, they need to stick to the timelines of refund, however, the rest of the guidelines will be followed as of their home country.

When does it start from

The order states effective August 1, 2016. However, there is no clarification if this is valid for tickets issued before August 1, 2016 as well as of now.

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  1. Wanna cancel my ticket.. how do i Get refund?? Booking reference number 210927170427.. anyone helps highly appreciated..

  2. There is certainly a way around for airlines to keep charging exorbitant cancellation charges. Increase base price + fuel surcharge to be around 2-2.2k – thats what they are charging and that is quite possible the way they operate – through cartels (unoffically offcourse). Thus I dont see this helping, but could back fire with increased base prices & hence more ticket prices.

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