DGCA proposes changes in air ticket cancellation charges, refunds, excess baggage fees

Limiting exorbitant air ticket cancellation fee, upto five-fold hike to Rs 20,000 in compensation for denied boarding and steep reduction in excess baggage fee are among a slew of steps proposed by Government on Saturday, in a move that will give fliers some reason to cheer.

The changes in the rules mooted by the Civil Aviation Ministry that will cover domestic and international flights involving Indian carriers come against the backdrop of complaints by passengers and cancellation and delays of over 4,000 and 63,400 flights respectively last year.

Civil Aviation Minister Ashok Gajapathi Raju said the measures followed complaints from passengers that issues concerning them are not getting resolved within a reasonable time.

The Government has given a two-week time to stakeholders to submit their suggestions and comments before finalising and implementing the new norms. The proposed changes in the excess baggage fee norm will, however, be implemented from June 15, Director General of Civil Aviation (DGCA) M Sathiyavathy said.

Suggesting a slew of passenger-centric measures, the Civil Aviation Ministry said airlines will have to refund all statutory taxes levied in the event of flight cancellations.

Aviation regulator DGCA has proposed that "under no circumstances the cancellation charges be more than the basic fare" and carriers cannot levy additional charge to process the refund.

In case of checked-in baggage, the airlines would be charging Rs 100 per kg for baggage weight in excess of 15 kg upto 20 kg. At present, Rs 300 is levied for every kg of baggage beyond the 15-kg limit.
Only Air India allows free baggage up to 23 kg.

With regard to denied boarding, mainly due to overbooking, the government has proposed compensation up to Rs 20,000 subject to certain conditions.

While all domestic airlines, including state-owned carrier Air India, refused to comment on the Government's proposed "passenger centric amendments," fliers body APAI welcomed the move, saying that the changes brought about after almost a decade will be a "big relief" to the fliers and encourage more people to take to air travel.

Aviation experts, however, criticised the proposed changes and said it could reverse the engine of growth in the aviation market, which grew fastest in the world last fiscal.

In January-March period, 10 Indian carriers accounted for a total of 18,512 delayed flights, according to the data presented in Parliament during the Budget session.

The proposals have been discussed with the airlines and "they are on board," Sathiyavathy claimed, adding, "We don't expect any resistance from the airlines." The Ministry has also proposed measures to help passengers with reduced mobility.

"We are extremely happy that the changes that have been mooted will benefit passengers in a big way. It will encourage more people to fly and spur the growth of the domestic aviation market, which has grown fastest in the world," Air Passengers Association of India (APAI) president D Sudhakara Reddy said.

Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG, however, said that the proposals would have a direct bearing on airline's bottom-line.

"The Indian aviation sector is finally coming out of the woods thanks to the low oil prices, rising economy and growing aircraft fleet. It needs three-four years of 18-20% annual growth to consolidate and expand; and to recover the huge debt and losses of the past. Care should be taken by the government not to throttle the aviation sector so much in the name of honouring public sentiments that it takes us back to square one," Dubey said.

The government has spent seven months in public consultations on the draft aviation policy, he said, adding, "one hopes the ministry gives at least four weeks to the airlines to respond to such drastic provisions".

For denied boarding and flight cancellations, DGCA proposed revised compensation structures depending on the arrangement of an alternative flight for the traveller.

An amount equal to 200% of booked one-way basic fare plus airline fuel charge subject to the maximum limit of Rs 10,000 would be given in case the carrier arranges the alternative flight within 24 hours of the scheduled departure.

The amount would go up to 400% of booked one-way basic fare plus airline fuel charge and the maximum would be Rs 20,000 where the alternative flight is provided after 24 hours.

"In case the passenger does not opt for an alternative flight, refund of full value of ticket and compensation equal to 400% of booked one-way basic fare plus airline fuel charge, subject to maximum of Rs 20,000 will be given," the regulator said.

According to the watchdog, no compensation would be paid if a passenger is informed about the cancellation at least two weeks before the scheduled departure and if the airline has arranged another flight depending on the passenger's convenience.

This would be applicable, subject to conditions, even in instances where the cancellation has been informed less than two weeks and up to 24 hours before the scheduled departure.

In such a case, there would be no compensation if the carrier has arranged alternative flight scheduled to depart within two hours of their booked scheduled departure. 

In cancellations, the financial compensation would be Rs 5,000 or booked one-way basic fare plus airline fuel charge, whichever is less, for flights having a block time of up to one hour. This quantum would be Rs 7,500 in case of flights having a block time of one to two hours.

For flights having a block time of more than two hours, the financial compensation would go up to Rs 10,000.

Block hours refer to the moment a commercial aircraft leaves the departure gate until it lands and reaches the arrival gate, or till its engines are working.

Airlines would be required to refund "all statutory taxes and User Development Fee (UDF)/Airport Development Fee (ADF)/ Passenger Development Fee (PSF) to the passengers in case of cancellation/non-utilisation of tickets/no show".

As per existing CAR, carriers have to return PSF collected by them in case of cancellation of a flight.

Besides, return of taxes and fee would be applicable for all types of fares including "promos/special fares and where the basic fare is non-refundable.

DGCA has suggested that the option of holding refund amount in credit shell by the airline would be the prerogative of the passenger.

It has been proposed that the onus of the refund of tickets, which are booked through travel agent or portal, would be on the carriers.

"The refund process shall be completed within 15 working days in case of domestic travel and 30 working days in case of international travel," DGCA said.

For foreign airlines, the refund would be in accordance with the regulations of their respective countries while the mode of refund would be governed by Indian norms.

Seeking to put in place more friendly measures for people with reduced mobility, the regulator has proposed that airlines should develop a procedure for making advance request of stretcher and same should be displayed on the airline's website.

Among others, airports would provide "towable ramp to such people in case ambulift or aerobridge facility are not available".

"Airport operator shall ensure that assistive devices being used to assist a disabled passenger are as per the standards set by the Ministry of Social Justice and Empowerment," the regulator said.

For sensitisation and creating awareness about assisting people with disability or reduced mobility, airlines, airport operators, security personnel, customs and immigration departments would conduct training programmes for their personnel. It would be done as per the training module provided by the Ministry of Social Justice and Empowerment.