SC approves DGCA’s recommendations on refund of airfare through credit shells

In a major relief to passengers, whose flights got cancelled due to the COVID-19 lockdown, the Supreme Court on Thursday accepted the recommendations of the Director General of Civil Aviation (DGCA) to refund ticket fares and also approved a credit shell scheme which will be valid till March 31.

A bench of the apex court, headed by Justice Ashok Bhushan, clarified that if tickets were purchased through agents, then the refund will also be done to the agents.

“Wherever vouchers are issued through agents, they have to be utilised only through agents…,” the bench said. The apex court also asked the Ministry of Civil Aviation to issue compliance notification in the matter.

If a passenger booked a ticket during the lockdown period (from March 25 to May 24) for travel during lockdown period and the airline has received payment for booking of air ticket for travel during the same period, for both domestic and international air travel and refund is sought by the passenger against that booking being cancelled, the airline shall refund the full amount collected without any cancellation charges. The refund shall be made within a period of three weeks from the date of cancellation, the order said.

The Bench said that the passengers who booked tickets at any period of time but for travel after May 24, refund of fares to the passengers covered under this category shall be governed by the provisions of the Civil Aviation Requirements (CAR).

“Even for international travel, when the tickets have been booked on an Indian carrier and the booking is ex-India, if the tickets have been booked during the lockdown period for travel within the lockdown period, immediate refund shall be made,” the order said.

“If the tickets are booked for international travel on a foreign carrier and the booking is ex-India during the lockdown period for travel within the lockdown period, full refund shall be given by the airlines and said amount shall be passed on immediately by the agent to the passengers, wherever such tickets are booked through agents. In all other cases airline shall refund the collected amount to the passenger within a period of three weeks,” it added.

It said the airlines shall make all endeavours to refund the collected amount to the passenger within 15 days.

“If on account of financial distress, any airline/ airlines are not able to do so, they shall provide credit shell, equal to the amount of fare collected, in the name of passenger when the booking is done either directly by the passenger or through travel agent so as to consume the same on or before March 31, 2021. It is open to the passenger either to utilize such credit shell upto March 31, 2021 , on any route of his choice or the passenger can transfer the credit shell to any person including the travel agent through whom he/ she has booked the ticket and the airlines shall honour such a transfer,” the order said.

The bench said that the credit shell issued in the name of the passenger shall be transferable which can be utilized upto March 31, 2021 , and the concerned airline shall honour such a transfer by devising a mechanism to facilitate such a transfer.

“In all cases where credit shell is issued there shall be an incentive to compensate the passenger from the date of cancellation upto June 30, 2020, in which event the credit shell shall be enhanced by 0.5 per cent of the face value for every month or part thereof between the date of cancellation and June 30, 2020. Thereafter the value of the credit shell shall be enhanced by 0.75 per cent of the face value per month upto March 31, 2021,” it said.

It court also made it clear that such credit shell can be utilized by the concerned agent through whom the ticket is booked, for third-party use.

The order came on a batch of petitions seeking the refund of air airfare to passengers whose flights were cancelled due to the COVID-19 lockdown.