When global pandemic hit the aviation sector, none of the airlines were operating. People who were making new bookings or already had bookings on the lockdown dates were provided with credit shells. Each of the airlines has a different policy regarding their credit shells. But all of them gave it against the customer’s cancelled tickets value. Most of the customers felt cheated because it was their money and they didn’t want to travel at a future date. So Directorate General of Civil Aviation (DGCA) asked the airlines to return the money for specific customers. The airlines complied and returned the money to some of the customers who had booked their travel for a particular period. But most of the customers still had credit shells allotted to them, they didn’t get their money back and it looks like they won’t either.
Cash-Strapped Airlines Won’t Refund Rs 3,000 Crore
The airlines in total owe their customers around Rs 3,000 crore. It is very unlikely that they will return the amount. This is because the operations are at an all-time low. Each of the airlines has been operating at loss. Thus it becomes almost impossible for them to dig deep in their pockets and refund the credit shell amounts to their customers.
But another detail that should be noted is that most of the passengers have also redeemed their credit shells. Out of the Rs 3,000 crore in credit shells, customers have approximately redeemed the half of it — Rs 1,500 crore.
The government knows and understands that the aviation industry cannot and should not be forced to refund the due amount right know. Things haven’t been very easy for the aviation industry. While the operations are only resuming, it will still take a lot of time for things to become normal. IATA predicted that it will take the aviation industry at least till 2024 to see normal demand as of pre-COVID19 pandemic.
An anonymous airline executive was quoted saying, “Some airlines may be comparatively comfortable with cash but that does not mean the airline has money to process refunds. Airlines are struggling to pay salaries and are laying off to reduce cost and losses.”