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Refund of Airline Tickets- Limit cancellation fee within basic fare excluding fuel charge

Biji Eapen National President – IAAI

The new reforms drafted by the civil aviation ministry on name change and free cancellation of airline tickets within 24 hours of booking is a relief to the travelling public and boost to the aviation industry. The name correction facility and compensations on denied boarding, delay and flight cancellation will provide relief to passengers and also improve the flying experience in India.

Limit cancellation fee within basic fare excluding fuel charge

The draft directs airlines to print cancellation charges on the ticket and airline and their agents and together should not, under any circumstances, levy cancellation charge more than the basic fare plus fuel surcharge. Why should the cancellation fee exceeds base fare to include fuel charge? Why should we pay for what we are not using?
I think it’s important that the travelling public also should be positively aware the terminology and the components that forms the tariff.

Why should cancellation fees be more than the base fare? A base fare is the price of airline ticket before fees, taxes, and any surcharges are added. Even our Aircraft Rules 1937, Rule 3 Clause 54A also defines explicitly that ‘Tariff’ is the combination of fare, fees and other taxes.

Though the airline base fare is the combination of trip fuel based on the mileage, time consumption and overheads, which normally a single constituent, however, today, airline breaks-up ‘fare’ as two separate components – base fare and Fuel surcharge (trip fuel bundled with surcharges). The fare will show as ‘base fare’, whereas the fuel surcharge being entered under the tax code ‘YQ’ is neither reportable to IATA nor to the government, paves the way for evading taxation. In fact, IATA had recommended that fuel charges including surcharges if any, has to be entered under the tax code ‘Q’ at the time of reservation, which will automatically be merged to the base fare to generate a single component at the time of ticketing.

When passenger is not travelling, there is no fuel consumption required. Hence, when the carrier is not consuming or burning any ‘Fuel or gasoline’ on the account of that passenger’s carriage, the airline cannot retain such and the unused ‘fuel charge’ portion should be refunded.

Therefore, fuel charges cannot become a part of the cancellation charges and any attempt to include this into the basic fare without merging both fare and fuel charges together is illegal and a total violation of the law.

Under such, we request the Ministry of Civil Aviation to review and amend the draft to specify that, cancellation charges under any circumstances, should not be more than the basic fare. It is our moral responsibility to educate the travelling public as well.

Law should not be interpreted discriminatively

When this new drift law is being applicable to all airlines operating in India, Vistara’s COO Sanjiv Kapoor statement carried by Hindu on 24th May, embarrassed the industry, that bookings made through their website and common service centers will only get benefits. Justifying a refined crusade to avoid travel agents. Especially an airline excitedly awaiting arrival of the 21st aircraft for taking the next leapto fly international.

Today, the bane of the industry is the man-made discriminations like this. DGCA CAR section -3 for refund of airline tickets to passengers specifically directs airlines to ensure that this process should be complied through the respective travel agents/ portals.

Travel agents are the extended arms of airlines. Agents are the real promoters of airline products. Airlines and agents are the two sides of a coin. If an airline does not want the agents and are confident of filling the aircraft without agents, why should Agents support them or promote their products?

One has to think positively and loudly.