Faster payback, no hidden fees: DGCA proposes passenger friendly refund norms for airlines

The Directorate General of Civil Aviation (DGCA) has proposed new Civil Aviation Requirements (CAR) under Section 3 – Air Transport, Series ‘M’, Part II, laying down minimum standards for refund of airline tickets purchased by passengers from public transport undertakings. The proposal will apply to all scheduled domestic operators, non-scheduled operators, and foreign carriers operating to and from India.

The draft CAR, issued in public interest under Rule 133A of the Aircraft Rules and the Ministry of Civil Aviation’s 2008 order, proposes a comprehensive framework to address passenger grievances relating to ticket refunds. The DGCA noted that a large number of complaints continue to be received regarding delays in refunds, partial reimbursements, and instances where airlines refuse to refund money and instead offer credits for future travel.

While the government has generally avoided intervening in airlines’ commercial practices, the DGCA said the growing volume of complaints necessitates regulatory action to set minimum benchmarks for refund policies and safeguard passenger interests.

As per the proposed CAR, airlines would be required to refund fares paid via credit card within seven days of cancellation, while cash refunds must be issued immediately at the airline’s office. For tickets booked through travel agents or online portals, the onus of refund will lie with the airline, which must ensure the process is completed within 21 working days.

The DGCA has also proposed mandatory refunds of all statutory taxes and airport-related charges, including the User Development Fee (UDF), Airport Development Fee (ADF), and Passenger Service Fee (PSF) even for non-refundable or promotional fares.

Additionally, airlines would have to provide passengers with a 48-hour “look-in” option after booking, allowing cancellations or amendments without additional charges, except for any difference in fare. However, this facility would not apply to flights departing within five days (for domestic) or fifteen days (for international) of booking.

The proposal further clarifies that the option to hold refunds in a credit shell will rest solely with passengers and cannot be made a default practice. Airlines would also need to display cancellation charges prominently at the time of booking, and these charges cannot exceed the basic fare plus fuel surcharge.

The DGCA has also proposed prohibiting additional processing fees for refunds or name corrections made within 24 hours of booking. In cases of cancellation due to medical emergencies, airlines may provide either a refund or a credit shell.