Air travel has just got more expensive. Now, passengers have to pay more not just for booking, but also for cancelling tickets. From April 1 all domestic airlines except Air India have increased fee for cancellations and date change by Rs 200 to Rs 950.
Already cost of tickets has gone up by about 5 percent due to increase in service tax. Travel agents are anticipating another hike in fuel surcharge because of recent increase in aviation turbine fuel. And now cancelling tickets too has got dear. Spokespersons of IndiGo, Jet Airways and SpiceJet did not respond to email query on the subject.
Cancellation fees were introduced to deter passengers from making last minute cancellations. Business travellers make multiple bookings resulting in "no shows'' at airport. To put a check to this airlines introduced cancellation fees which can vary for different fare levels and classes. Low cost airlines do not give a cash refund on deducting cancellation fee but allow passenger to retain the balance as a credit for future bookings.
"Airlines have their backs to wall,'' an executive from a private airline observed referring to increase in operating costs and mounting losses. According to him increase in cancellation fee could help airlines in two ways - control distribution costs and add extra revenue to kitty. Airlines pay a fee to global distribution system for every booking irrespective of whether a ticket is issued or not to the passenger.
"Increase in cancellation fees will not prevent last minute cancellations or stop multiple bookings but there will be a deterrence,'' he said.
"Fuel costs have gone up by about 10 percent in last two months. Airports are increasing tariffs. Why should the airlines not have flexibility to earn revenue,'' another senior executive from a private airline asked. All airlines are selling tickets in higher fare slabs as Kingfisher Airlines has reduced flights.
Raj Halve, ex-commercial officer of GoAir does not view the hike in cancellation fee as a means to increase revenue. "The impact of a unsold seat is far higher to the airline than collecting higher cancellation fee. Typically an airline will be able to sell a cancelled ticket only if the occupancy levels are over 90 percent.''
