The Supreme Court asked the airlines to refund or provide a credit shell for the cost of tickets booked before COVID-19 pandemic for travels during the lockdown. The verdict came as a response to a petition filed by NGO Pravasi Legal Cell and Air Passengers Association seeking refunds for tickets booked before lockdown for travel during the lockdown. The civil aviation regulator Directorate General of Civil Aviation (DGCA) prepared a 48-page affidavit, sounding a proposal to harmonize the interests of both passengers and the airlines. The Supreme Court accepted the suggestions proposed by DGCA.
Interests Accrue on Credit Shell
The airlines may also create a credit shell against the cancelled tickets in the name of the passenger, in case the airline is financially distressed. The passenger may use the credit shell for travel on any route before March 31, 2021. Such credit shells shall be transferrable, and a nominal interest will accrue on the money in the credit shell. The interest of 0.5 percent will be added to the credit shell until June 30, 2020, and thereafter, 0.75 percent of interest until March 31, 2021.
In case if the traveller books for tickets above the credit shell limit, the passenger can top up. If it is less, the balance would be refunded.
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The airlines will have to make the full and immediate refund of the tickets within three weeks from the date of cancellation to passengers who booked tickets during the lockdown. This is applicable for both domestic and international flights run by Indian or foreign carriers.
In case, the passenger booked the tickets through travel agents, the airlines will have to refund the fund to the travel agents, who should then transfer it to the passengers.
Pandemic Adversely Affected the Aviation Sector
The Court considered the adverse effect of the pandemic on the economy globally, especially on the aviation sector.
“The formulation of refund and credit shell policy are workable solutions in these peculiar circumstances prevailing in the country,” the Court observed.
The Court also agreed that a strict imposition of law on the matter on airlines might not yield meaningful results. The Court asked DGCA to ensure that the airlines strictly comply with the order.
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On April 16, 2020, DGCA issued an order to airlines asking them to immediately refund for tickets booked during the lockdown. The lockdown extended between March 25 and May 24. This order too stays intact.
Justices Ashok Bhushan, R. Subhash Reddy and M.R. Shah, were the Judges on Bench for the order.