The Supreme Court on Friday asked the Ministry of Civil Aviation to meet with airlines and work out a credit pattern on air tickets cancelled during the lockdown period.
A Bench of Justices Ashok Bhushan, S.K. Kaul and M.R. Shah suggested to the government that the credit shell should be operational for up to one-and-a-half to two years.
“We want to know exactly what is done,” the court observed.
Senior advocate Harish Salve, representing airline interests, said a full refund of air tickets cancelled during the lockdown is not being given anywhere in the world.
“Airlines are not refunding tickets. Credit is being given. Airlines have already created a credit shell,” Mr. Salve submitted.
He said: “we have zero revenue... Absolute zero revenue”.
Mr Salve suggested that “we can sit with the Ministry of Civil Aviation and come back with a credit pattern”.
“The Ministry should call airlines and have a conversation with them,” he said.
Mr. Salve pointed out that the petition filed by NGO Pravasi Legal Cell, seeking a full refund for cancelled tickets, has not impleaded other airlines. “They are affected parties,” the senior lawyer noted.
The court asked the Centre to submit its response in three weeks, taking a stand on the issue.
The petition has primarily challenged an April 16 Office Memorandum (OM) of the Civil Aviation Ministry which covers only the refund of tickets booked during the lockdown period. The OM leaves out the vast majority of passengers who had booked tickets before the flights were banned due to the lockdown.
“There is no question of anyone booking a ticket during the lockdown period knowing the fact that schedule passenger flights were cancelled for period of travel. This makes the Office Memorandum of the Ministry of Civil Aviation ambiguous and devoid of any logic. The Office Memorandum is in clear violation of the fundamental rights guaranteed under the Constitution in so far as directing the airlines to provide full refund of ticket amount only if the ticket is booked during the lockdown period for travel during the lockdown, which amounts to treating equals unequally,” the petition had contended.
It said the OM indirectly approves the practice of airlines providing credit shell for booking effected before the lockdown, though the same clearly violates the refund rules of the Directorate-General of Civil Aviation (DGCA).
“Airlines instead of providing the full refund of the amount collected for the tickets due to cancellation, are providing a credit shell, valid upto one year, which is clear in violation of the Civil Aviation Requirement of May 2008 issued by the Directorate General of Civil Aviation (DGCA),” the petition said.
It said the DGCA clearly required that “the option of holding the refund amount in credit shell by the airlines shall be the prerogative of the passenger and not a default practice of the airline”.
The May 2008 DGCA requirement mandates that refunds should be done within seven days from date of cancellation in case of credit card payments. In case of cash payment, the ticket refund should be made immediately.
On the other hand, the April 16 Memorandum allows airlines 30 days after receiving a passenger’s request for a refund.
“Airline companies, instead of showing humanitarian virtues, are rather seeing these challenging times as an opportunity to extract unlawful gains from the people who are already in misery due to uncertainties. That the present policy is extremely harsh on the ordinary passengers who booked tickets in advance for travelling,” the petition said.