Ever tried cancelling an air ticket? At best, you will get Rs 225 cash back, irrespective of the ticket price, if you happen to miss your flight. And if you decide to cancel your ticket, even days in advance, you’ll get back nothing! Air passengers across India are being taken for a ride by airlines on refund policies.
Passengers booked on full-service carriers don’t get back any cash if they cancel a ticket, even days ahead of their scheduled departure. “I had booked a ticket with SpiceJet, which I cancelled well in advance (five days). Apart from forfeiting the entire fare, the airline deducted the full travel insurance charge. Majority of the surcharge and taxes were also gobbled up,” said a partner in a Mumbai-based chartered accountancy firm B Maheshwari.
Airlines deduct Rs 500-750 from the ticket amount (which includes ‘taxes and surcharges’ of Rs 1,725) while the balance amount is credited to a non-refundable account. A passenger can use this non-refundable amount to travel by the same airline within 12 months.
But if the passenger decides not to travel by that airline, the full amount is forfeited! In case one decides to postpone travel, one will have to bear the cost of the air ticket to that destination on that day. If the fare is higher, the passenger will have to shell out more money and if it’s lower, most carriers don’t refund the balance. Did someone say policy of convenience? Now, let’s consider a ‘no-show’ on an airline.
"If a passenger happens to miss his/her flight, only the passenger service fee of Rs 225 is refunded," explained an official of a low-cost carrier. He also pointed out that while all low-cost carriers deduct Rs 750, Simplifly Deccan deducts Rs 500 in case of cancellation.
The Travel Agents Federation of India (TAFI) is also up in arms against the classification of surcharges under taxes, which are forfeited by airlines. The only reason for such a classification is to deprive travel agents of their legitimate commission, say travel agents, who get a commission on the fare but not on the surcharge.
“First of all, fuel surcharge and congestion charge (which amount to about Rs 1,800) should not be included in taxes. And in case they are, airlines should refund the whole tax amount to the customer in case of a cancellation or no-show,” says TAFI general secretary Ajay Prakash.
From Monday, airlines will increase the fuel surcharge by Rs 300 and travel agents across India are set to protest against this. “We are contemplating issuing an ultimatum to airlines that henceforth travel agents will not collect any additional surcharge on their behalf. They will need to make arrangements to collect the same from passengers directly,” Mr Prakash said.
SpiceJet VP-marketing and planning Kamal Hingorani says, “Fuel surcharge is not refunded in case of cancellation because if a passenger cancels the ticket at the last moment, there is an opportunity cost that the airline has to incur. For instance, the ticket could have been sold at a higher price. Selling it at a short notice is difficult.”
According to airline policy, “Cancellation/changes within two hours of departure or failure to check-in at least 30 minutes before scheduled departure will result in the fare being forfeited.”
Air Passenger Association of India (APAI) president Sudhakar Reddy is also unhappy with airlines. “With fuel surcharge increasing by Rs 300, amounting to Rs 1,625, this is even more misleading on the part of airlines.” Taking notice of the discriminatory refund policies of airlines, the Monopolies and Restrictive Trade Practices Commission (MRTPC), in May this year, had issued notices to six carriers—Indian, GoAir, Air Sahara, Air Deccan, SpiceJet and Alliance Air—terming their refund policies as unfair.
Union minister for civil aviation Praful Patel has also taken notice of the refund policies of airlines. “We will not only penalise them but also make them refund the money collected on account of tax,” he said on the issue of “cartelisation by airline companies” during question hour in Lok Sabha on Thursday.
On the other hand, the European Union on Friday issued new guidelines under which airlines must include all taxes and charges in the headline price first shown to consumers. Clearly, the Indian government also needs to take a strong view on discriminatory refund policies, which are hurting consumer interests
COURTESY INDIAN ECONOMIC TIMES
So airlines all over the world are the same!
