Airlines Struggling To Refund For Tickets Booked During Lockdown

Air India is struggling to refund passengers for tickets booked during last year’s nationwide lockdown as the cash-strapped national carrier battles the twin effects of higher fuel prices and low passenger traffic.

Private airlines SpiceJet Ltd and Vistara meanwhile said they are complying with the Supreme Court’s orders on fare refunds.

Last September, the apex court directed airlines to immediately refund fares booked for travel until 24 May 2020. The Directorate General of Civil Aviation (DGCA) had separately issued a notification on 16 April, ordering airlines to immediately refund tickets booked during the first phase of the lockdown from 25 March to 14 April.

The SC said in its order that the value of an air ticket refunded through credit shell vouchers will be increased by 0.50% per month (6% per annum) till 30 June 2020 and thereafter till 31 March 2021 by 0.75% per month (9% per annum). However, only airlines in financial distress could issue credit shell vouchers till March-end.

“Due to complete stoppage of flights during the lockdown, followed by a gradual restoration of flights in the domestic and international sectors, the revenue stream was severely impacted, whereas fixed costs had to be incurred at the same time,” a spokesperson for Air India said in an emailed response. The spokesperson did not disclose the amount the carrier owes its customers.

Mint reported on 8 February that Air India may incur a net loss of ₹9,500-10,000 crore this fiscal, up from the ₹8,000 crore loss recorded in FY19-20.

The Air India spokesperson said because of the “unprecedented situation”, the airline has stopped automatic refunds in global sales distribution (GDS) and the refunds are being processed through the airline’s own offices within “pre-assigned budgeted amounts”. GDS is a real-time reservation platform that facilitates transactions between travel agents and service providers such as airlines and hotels.

“The refunds are progressively increasing with the increase in revenue of the company. Air India is planning to open automated refunds on more occasions as the situation improves,” the spokesperson said.

The chief executive officer of an online travel agency who declined to be named said Air India is the only Indian airline still to refund passengers for tickets booked for travel during the lockdown.

“Vistara is in full compliance with the honorable Supreme Court’s order on refunds to customers affected by the suspension of air travel in 2020, during the nationwide lockdown,” said a spokesperson for the carrier owned by Tata Sons Ltd and Singapore Airlines Ltd.

A spokesperson for budget airline SpiceJet said in an emailed response that “refunds are governed by the order of the Supreme Court and we are adhering to those directions”.

Both spokespersons did not say whether Vistara and SpiceJet have made full refunds to their customers.

(Source: Live Mint, not edited by travelobiz staff)

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