Soon, travellers to get full refund if airlines downgrade ticket

The Ministry of Civil Aviation has said the aviation regulator DGCA (Directorate General of Civil Aviation) is in the process of making changes to provisions to protect the rights of air travellers affected by the downgrading of tickets. The ministry, in a statement, said today it has been noticed that sometimes airlines downgrade passengers' tickets, which is why it needs to amend existing rules to protect travellers.

The amendments will allow the passenger, whose ticket is downgraded involuntarily from his booked class of ticket, to receive the full value of the ticket, including taxes as a refund from the airline. The airline will also carry the passenger for “free” in the next available class, said the ministry. The proposal, however, will go through stakeholder consultation first, following which it'll be implemented.

For example, when a passenger books his ticket on first class, business class or premium economy, the ticket is downgraded to a lower class at the time of check-in due to reasons like unserviceable seats, change of aircraft, overbooking, etc. To cater to such situations, the DGCA is in the process of amending the Civil Aviation Requirement (CAR) Section-3, Series M Part IV “Facilities to be provided to passengers by airlines due to denied boarding, cancellation of flights and delays in flights”. The change in norms is going to protect the rights of air travellers affected by the downgrading of tickets.

As part of other compensation provisions specified in the civil aviation's requirement, if the airline has overbooked a flight, it is mandated to ask for volunteers in exchange for benefits. If the airline denies boarding a passenger against confirmed booking for travel, no compensation is given if the airline arranges an alternate flight within 1 hour of the original departure.

If the airline denies boarding a passenger against confirmed bookings for travel on the flight, s(he) must be compensated if the alternate flight is in 24hrs of the original departure -- 200% of one-way fare + fuel charge (maximum ₹10,000) or 400% of one-way fare + fuel charge (max ₹20,000). In case a passenger does not opt for an alternate flight, he gets a full refund and 400% of the one-way fare + fuel charge (max ₹20,000).

In case of flight cancellation, if an airline expects cancellation of a flight, it has to inform and arrange an alternate flight at least two weeks in advance. If an airline cancels a flight less than two weeks before and up to 24 hrs after the booked flight, it must arrange an alternate flight in 2 hrs of the original departure or refund the ticket. If an airline cancels a flight in less than 24 hours of booked flight, it must refund the air ticket and provide compensation from ₹5,000 to ₹10,000.

Separately, amid mounting losses due to Covid disruptions, high ATF prices and other costs, the aviation industry is estimated to have reported a net loss of ₹11,658 crore during the financial year 2021-2022, civil aviation minister Jyotiraditya Scindia said in the Lok Sabha. He said high losses were incurred due to COVID-19 disruptions, rupee depreciation against the US dollar, and a high operating cost environment, especially due to an increase in ATF prices, which constitute a major portion of the operational cost of airlines. Issues like the increase in crude oil prices in the international market, VAT, excise duty and the Russia-Ukraine War also hurt the airline industry's business.

The minister said the airlines were also unable to pass the full impact of cost increases to passengers. "The details of losses incurred by the industry during the last three years are FY2019-20 ₹4,770 crore; FY2020-21 ₹12,479 crore; and FY2021-22 ₹11,658 crore."