India Supreme Court Lays Down Judgement on Airline Refunds

Travel agents become financiers for airlines

India Supreme Court Lays Down Judgement on Airline Refunds

The Honorable Supreme Court of India issued a judgement today with regards to a Writ Petition filed for airline refunds which occurred because of the COVID-19 global pandemic lockdown.

The Travel Agents Association of India (TAAI) President Mrs. Jyoti Mayal said: “We respect the judgement of the Supreme Court but feel that the judgement is status quo to what the Directorate General of Civil Aviation (DGCA) has previously directed the airlines on. [There is] nothing really to appease our challenges and multiple communications and meetings we had with the Ministry of Civil Aviation (MoCA) and the airlines in the matter.

“The airlines mostly were giving credit shells if they were struggling with cash, and they will continue to do so stating their inability [to do otherwise]. The 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.

“During our meeting with MoCA, we had demanded interest on delayed refunds. The Honorable Supreme Court 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 [a] 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.”

The Vice President of TAAI, Jay Bhatia, said: “We are deeply concerned on the submissions of certain airlines that they shall shutdown in case pressured for refunds. What if airlines default before March 31, 2021? Who is going to be responsible? The government needs to ensure appropriate assurances/guarantee[s] from the airlines concerned so as to secure the monies.

“Agents pay advances into float accounts of the airlines, and it is their right to claim the monies back for un-utilized funds/nonticketed 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, refunds need to be paid. The date for complying with refunds post that is not given.”

Mayal added that DGCA has washed its hands of the SOTO [self-operating tour operators] ticket refunds by airlines. “There has been no direction on the refunds for groups and series bookings done by the agents with the airlines,” she said.

The Honorable Supreme Court of India has not provided any comments.

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