Travel Trade Offers Mixed Reaction On SC Refunds Ruling

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Representational picture. Source: Instagram

Thursday’s Supreme Court judgement on a Writ Petition for airline ticket refunds due to the global pandemic lockdown received a mixed response from the travel trade with one section terming it as status quo and another welcoming the option of credit shell transfers being allowed.

Pronouncing its judgement on a Writ Petition filed by the Pravasi Legal Cell, a three-member bench comprising Justice Ashok Bhushan, Justice R Subhash Reddy and Justice M R Shah of the Supreme Court (SC) had observed that strict enforcement of Civil Aviation Requirements (CAR) at the moment may not yield any meaningful results for any stake holder.

The Travel Agents Association of India (TAAI) said that it while it respected the judgement of Supreme Court, it felt that the judgement is status quo to what the Directorate General of Civil Aviation (DGCA) has previously directed the airlines on.

“Nothing really to appease our challenges and multiple communications and meetings had with Ministry of Civil Aviation (MoCA) and the airlines in the matter,” stated TAAI President Jyoti Mayal.

Ms. Mayal pointed that the airlines were mostly giving credit shells. “If they were struggling with cash and they will continue to do so stating their inability. Only respite from the earlier direction is that the credit shells will be given to agents if booked through them and not the customer as some airlines were doing.”

TAAI said that during their meeting with MoCA, members had demanded interest on delayed refunds. The SC has directed 0.5% extra top-up every month on the face-value of the ticket, up to June 30, 2020 and thereafter 0.75% up to March 31, 2021.

“This is much below the standard bank interest rates. Agents and customers are struggling with cash crunch and basic interest paid to banks is at much higher rates. The agent fraternity needed total cash refunds. We the travel agents have become financiers for the airlines,” Jay Bhatia, Vice President TAAI said.

Mr. Bhatia added that they are deeply concerned on the submissions of certain airlines, that they shall shutdown incase pressured for refunds. “What if an airline defaults before March 31, 2021 who is going to be responsible? The Government needs to ensure appropriate assurances/guarantee from the airline/s concerned so as to secure the monies,” Mr. Bhatia asked.

TAAI said agents pay advances into float accounts of the airlines and it is their right to claim the monies back for un-utilised funds/non-ticketed balances lying with the airlines. “It is also important to note that there is an ambiguity on the credit shell through agents to remain up to March 31, 2021, thereafter refund needs to be paid. The date for complying with refunds post that is not given, Mr. Bhatia said.

Ms. Mayal explained that DGCA has washed hands on the Sold Outside Ticketed Outside (SOTO) ticket refunds by airline/s. “There has been no direction on the refunds for groups and series bookings done by the agents with the airlines. The SC too has not commented on that at all,” she said.

The Travel Agents Federation of India (TAFI) on the other hand welcomed the SC decision on refunds. “It is now open to the passenger either to utilize such credit shell up to March 31, 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,” TAFI President Pradip Lulla said welcoming the possibility of transferring the credit shell.

Mr. Lulla said that refunds had become a contentious issue, and the matter has become even more complicated with the resumption of domestic flights. “Policies are not stable, and our credibility as travel agents is at stake,” he said.

The TAFI President observed that this would benefit corporate entities who had booked tickets in the name of one employee and the same could now be transferred to another employee or the travel agent who could use it to be book a new ticket. “This will aid the ease of doing business for travel agents,” he said.


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Deputy Editor, AviatorsBuzz Aditya Anand in his nearly two decades of Journalism experience has tracked Aviation, Travel, and Hospitality closely and reported on it for major publications like The Hindu, Mumbai Mirror, and MIDDAY.