DGCA proposes changes to airline refund rules — including 48-hour free cancellation and more

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Amid mounting passenger complaints about refund delays and arbitrary cancellation charges, India’s aviation regulator — the Directorate General of Civil Aviation (DGCA) — has rolled out a set of sweeping proposals to bring more transparency and accountability to airline refund policies.

The new framework — introduced under the Civil Aviation Requirements (CAR) — will apply to all scheduled and non-scheduled domestic operators, as well as international carriers operating from India.

At the heart of the draft guidelines is a 48-hour “look-in” window, which would allow passengers to cancel or modify their air tickets within two days of booking without any extra charges. The DGCA has invited public feedback on these proposals until November 30, following which the final policy will be notified.

Why DGCA stepped in

In its draft circular, the DGCA noted that it receives a large volume of passenger complaints, mostly concerning refund delays, partial refunds, and credit shell adjustments valid only for a short period. The regulator said it is now time to set minimum benchmarks for refunds to improve passenger trust in India’s rapidly expanding aviation sector. The new norms, laid out under the Civil Aviation Requirements (CAR), will apply to domestic and international airlines, as well as non-scheduled operators.

It is now believed that the onus is on the government to establish some minimum benchmarks for refund policy in order to alleviate growing passenger unhappiness with the refund procedures used by some airlines, Economic Times reported, quoting DGCA.

This civil aviation requirements (CAR) prescribes minimum requirements for the refund of ticket purchased by persons/passengers with respect to air transport undertakings including scheduled domestic/non-scheduled operators/ foreign carriage operating from India.

Key proposals at a glance

Under the proposed rules, the 48-hour “look-in” period will be available only for tickets booked directly through an airline’s website. However, it won’t apply to flights departing within five days (domestic) or 15 days (international) of the booking date. Beyond the 48-hour window, normal cancellation fees will apply.

The DGCA also suggested that airlines should not charge passengers for correcting spelling errors in their names if pointed out within 24 hours of booking.

Refund timelines have also been defined clearly:

• Seven days for credit card payments, credited directly to the cardholder’s account.
• Immediate refunds will have to be initiated for cash transactions at the point of purchase.
• In case the ticket is booked via travel agent or portals, the onus lie on airlines to ensure completion within 21 working days for the ticket booked

The draft mandates airlines to display cancellation charges prominently at the time of booking and cap them at no more than the basic fare plus fuel surcharge. Airlines will also have to refund all taxes and airport fees — including UDF, ADF, and PSF — even for non-refundable or promo fares in case of cancellation or no-shows.

Provisions for foreign carriers and medical emergencies