Hon’ble Supreme Court accepts the refund and credit shell policy scheme proposed by the Government
The court directed that airlines will have to give full and immediate refund — within three weeks from the date of cancellation — to passengers who had booked their flight tickets during lockdown for travel anytime between March 25 to May 24 (the period of lockdown). This is applicable to both domestic flights and international ones out of India on either Indian or foreign carriers.
In case the tickets were booked during the lockdown through travel agents for flights scrapped in the course of the lockdown, the airlines will pay the refunds to the travel agent, who will immediately transfer them to the passengers.
The court said the Civil Aviation Requirements (CARs) will, as usual, govern passengers who have booked tickets at any point of time for travel on dates beyond May 24.
In “all other cases” — which include tickets booked prior to the lockdown for travel during the freeze — the airlines will get 15 days from October 1 to refund the passengers.
The court also acknowledged the government’s alternative scheme for airlines to open credit shells in the names of passengers considering the financial loss the airline companies had to suffer due to air travel ban. The court found the scheme a necessary step to balance the interests of the passengers and the airline sector.
According to this scheme, a credit shell will be opened in the name of the passenger who booked the ticket. This shell is valid up to March 31, 2021. In case the passenger chooses not to use the credit shell, the airline will have to refund the ticket money by the end of March 2021.
The credit shell is transferable to any person of the passenger’s choice.
As an incentive mechanism, the proposal offered .5% increase in the valuation of the credit shell if it was not “consumed” till June 30, 2020. The value of the credit shell would increase .75% if the credit remains untouched till March 31, 2021.
Passengers can travel any route of their choice on the credit shell. If the fare is above the credit shell limit, it can be topped up. If it is less, the balance would be paid back to the passenger.