 "Govt strikes fair deal for flyers")
While the move was hailed as progressive by passengers, the airline industry warned that such populist moves could severely affect their revenue.
Among the several changes proposed by the DGCA is one that links cancellation charges to the base fare of tickets. “Under no circumstances the cancellation charge shall be more than the basic fare,” the proposed guideline from the Ministry of Civil Aviation said.
“The proposals have been made after several complaints from passengers,” said Civil Aviation Minister Ashok Gajapathy Raju.
The aviation regulator’s move is primarily in response to the hike in cancellation fees, especially by budget airlines, following which it had sought an explanation. IndiGo and SpiceJet have increased their cancellation fees to a flat Rs 2,250, while Go Air hiked them to Rs 2,225 in April.
Along with the cap on cancellation charges, the DGCA also proposed to increase the compensation in case of denied boarding and reduced the fees on excess baggage.
According to the proposed guidelines, an airline has to pay up to Rs 10,000 and Rs 20,000 as compensation if an alternate flight is not offered within one hour and beyond 24 hours, respectively. At present, the maximum compensation a passenger can receive in such a case is Rs 4,000.
Besides that, airlines will be allowed to charge a maximum Rs 100/kg instead of Rs 200/kg for baggage in excess of 15 kg and up to 20 kg.
Though Director General of Civil Aviation M Sathiyavathy said airlines were consulted before drafting the proposals, industry executives said the move could force carriers to increase the price of tickets.
Revenue earned from cancellation charges and excess baggage is a source of ancillary revenue of around 10 per cent of an airline’s total income.
“Of course, it will impact revenue in a big way. What the government is not realising is if such provisions are implemented the impact will be higher fares. Somehow, airlines will meet costs,” said an airline executive.
Airlines’ input costs are rising because of a weak rupee and rising crude oil prices. “Imagine what will happen to fares if fuel prices go up further and ancillary revenues are capped,” the executive said.
A Vistara spokesperson had earlier said airlines should be allowed to decide on cancellation fees and baggage allowance.
“As the Indian aviation sector is finally coming out of the woods, care should be taken by the government not to throttle the industry so much in the name of public sentiment that it takes us back to square one,” said Amber Dubey, Partner and India head of aerospace and defence, KPMG.
For foreign airlines, the refund would be in accordance with the regulations of their respective countries while the mode of refund would be governed by Indian norms. Seeking to put in place more friendly measures for people with reduced mobility, the regulator has proposed that airlines should develop a procedure for making advance request of stretcher and same should be displayed on the airline’s website.
Among others, airports would provide “towable ramp to such people in case ambulift or aerobridge facility are not available”. “Airport operator shall ensure that assistive devices being used to assist a disabled passenger are as per the standards set by the Ministry of Social Justice and Empowerment,” the DGCA said.
For sensitisation and creating awareness about assisting people with disability or reduced mobility, airlines, airport operators, security personnel, customs and immigration departments would conduct training programmes for their personnel. It would be done according to the training module provided by the Ministry of Social Justice and Empowerment.
CONSUMER-FRIENDLY SKIES
- Ticket cancellation amount cannot exceed basic fare
- Refund to be applicable on all fares, including promotional and special fares
- All taxes, levies and fees shall be refunded in case of no-show and ticket cancellation
- Flyers will not have to pay more than Rs 100 per kg for the first 5 kg of excess baggage
- If a flight is cancelled within 24 hours of departure, compensation should be one-way fare plus fuel charges or Rs 10,000, whichever is less
- If an airline overbooks a flight, it will have to arrange an alternate flight within an hour or pay compensation
- If the replacement flight is within 24 hours, the airline will have to pay 200% of the base fare or Rs 10,000, whichever is less. If it is beyond 24 hours, the compensation will be 400% of the base fare or Rs 20,000, whichever is less