Centre proposes overhaul of airline ticket cancellation charges
IN a move that could bring relief to passengers, the Centre will put forth a proposal to airlines for revision of their ticket cancellation charges, industry sources told BusinessLine.
The sector is deregulated, giving airlines the authority to set their own pricing standards on cancellation charges.
The proposal is part of the Ministry of Civil Aviation’s consultative process with stakeholders.
Presently, passengers often end up losing almost the entire booking amount on cancellation, as airlines deduct the base fare along with the fuel surcharge.
According to industry sources, the proposal will seek airlines’ suggestions as well as feedback on the ways and means to “substantially reduce the penalty.”
Cancellation charges
It proposes that the cancellation charges be devoid of fuel surcharges.
At present, some prominent airlines’ policies lead to charges (one-way ticket price of over ₹5,000) ranging from ₹4,999 to ₹3,999 or base fare plus fuel surcharge, whichever is lower for cancellations made more than 72 hours before domestic departures.
The penalty remains at around ₹2,499 or base fare (whichever is lower) if cancelled within 24–72 hours of departure.
On the other hand, a tiered structure is applied for international routes, where cancellation fees range between ₹3,000 and ₹7,500, depending on travel class, distance and how close to departure the cancellation occurs.
However, passengers can reduce these cancellation charges by paying “a little extra” unless they choose a non-refundable fare. For instance, cancellation charges reduce substantially on a one-way ticket priced over ₹5,000 with an additional payment of ₹500 to ₹1,000.
Meanwhile, the matter has drawn public as well as parliamentary scrutiny.
An earlier report of the Parliamentary Standing Committee on Transport, Tourism and Culture, cancellation fees imposed by airlines were found to be arbitrary, prompting calls for uniformity.
The committee had recommended that no airline should charge more than 50 per cent of the base fare and urged the Directorate General of Civil Aviation (DGCA) to keep a close watch on the practice.
As of now, cancellation charges are not directly regulated by the government. However, DGCA has issued a Civil Aviation Requirement (CAR) which stipulates that these charges must be displayed clearly at the time of booking.
Furthermore, airlines are barred from levying a fee higher than the basic fare plus fuel surcharge.
In addition, carriers must refund statutory levies such as User Development Fee (UDF), Airport Development Fee (ADF) and Passenger Service Fee (PSF) if a ticket is cancelled, not utilised or in cases of no-shows.
