DGCA proposes new rules for air ticket refunds: 48-hour free cancellation window, no forced credit shells

Aviation regulator DGCA has proposed sweeping changes to air ticket refund norms, which may allow passengers to cancel or amend their tickets without additional charges within 48 hours of booking.

In a draft Civil Aviation Requirement (CAR), the Directorate General of Civil Aviation (DGCA) said it had received a large number of complaints from passengers over delays, inadequate refunds, and restrictive airline policies that force customers to accept credit shells instead of cash refunds.

“The matter has been discussed in several meetings with the airlines with no improvementin the system adopted by airlines for refund of tickets. It is now considered that the onus rests with the Government to fix some minimum benchmarks,” the DGCA said in the draft circular.

Refund timelines

Under the proposed rules, refunds for tickets purchased through credit cards must be processed within seven days of cancellation, while cash refunds must be made immediately by the airline office where the ticket was purchased.

The DGCA has proposed that in case of purchase of a ticket through travel agents or online portals, the "onus of refund shall lie with the airlines as agents are their appointed representatives".

The draft also mandates that airlines refund all statutory taxes and airport fees, including User Development Fee (UDF), Airport Development Fee (ADF), and Passenger Service Fee (PSF), even for non-refundable or promotional fares, in cases of cancellations, “no-shows,” or unutilised tickets.

48-hour ‘look-in’ period

According to the DGCA, airlines will have to offer a “look-in option” of 48 hours after booking a ticket. During this period, passengers can cancel or amend their booking without any penalty, except for the difference in fare for a revised flight.

However, the provision will not apply to bookings made less than five days before departure for domestic flights or 15 days before departure for international flights.

Caps on cancellation fees

The DGCA has proposed that cancellation charges should not exceed the sum of the basic fare and fuel surcharge.

“This will exclude any charges levied by the travel agent, which have been fully disclosed at the time of booking,” it said.

Airlines will also be barred from levying any additional fee for processing refunds.

Cancellation charges must be displayed prominently at the time of booking, and airlines must clearly disclose the amount refundable on cancellation on the ticket or website, the circular said.

No forced credit shells

The circular makes it explicit that keeping refund amounts in a “credit shell”, to be used for future travel, should be purely at the discretion of the passenger and not a default airline practice.

Other provisions

The DGCA has also proposed that airlines should not charge passengers for correcting minor name errors if reported within 24 hours of booking through the airline’s website.

In cases of ticket cancellations due to medical emergencies, airlines may offer a full refund or a credit shell, according to the draft.

The proposed CAR, which will apply to all scheduled domestic, non-scheduled operators, and foreign carriers operating to and from India, aims to “stem the growing dissatisfaction among passengers regarding the refund procedures,” the DGCA said.