Air ticket refund: Here's how the Supreme Court order has some good news for customers, airlines and OTAs

The Supreme Court on October 1, approved the government's scheme to refund tickets booked during the lockdown, an issue that had led to a lot of angst among passengers.

Instead of refunding the tickets, airlines had created a credit shell that the customers could use, but with conditions attached.

Nishant Pitti of EaseMyTrip in a statement to Moneycontrol, simplifies the Apex Court's order and tells how it meets some of the concerns of all the stakeholders - customers, airlines and OTAs.

How customers benefit

If a passenger had booked a ticket during the lockdown period - from March 25 to May 25, when domestic flights resumed - and the booking was done either on an airline website or through an OTA, she will get a refund of the full amount. This is applicable for both, domestic and international air travel.

If she had booked on an OTA site, then the agency will refund the amount.

On the other hand, if the passenger had booked the ticket - irrespective of the time - but for travel from May 25, the refund of fares to the passengers covered under this category shall be governed by the provisions of Civil Aviation Requirements (CAR). The guideline applies for international travel, booked on Indian or foreign carriers.

Interestingly, the Court also provides for a compensation that a passenger can avail on the credit shell. "In all cases where credit shell is issued there shall be an incentive to compensate the passenger from the date of cancellation up to 30th June, 2020 in which event the credit shell shall be enhanced by 0.5 percent of the face value (the amount of fare collected) for every month or part thereof between the date of cancellation and 30th June, 2020. Thereafter the value of the credit shell shall be enhanced by 0.75 percent of the face value per month up to March 31, 2021," Pitti said, citing the order.

The larger question though is if the compensation is fair enough, or not.

For airline

At the same time, says Nitti, the Supreme Court has taken into note if an airline is facing financial distress and can't immediately refund tickets. In this case, the airline can use the credit shell mechanism.

The credit shell has to be used by the passenger on or before March 31, 2021.

"It is open to the passenger either to utilize such credit shell up to 31st March, 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," Pitti says, quoting the Supreme Court order.

In other words, the passenger can transfer the ticket to someone else, and can use the credit shell to travel on any route, and not just on which she had originally booked the ticket.

The concerned airline  will have to honour this guidelines by devising a
mechanism to facilitate such a transfer.

For travel agencies

The Supreme Court has allowed, says Pitti, for the travel agencies through whom the ticket has been booked, to use the credit shell for third party use. In other words, the ticket holder can transfer the ticket to another person, through a travel agent.

Only the original travel agent can use the credit shell for further booking.