The Supreme Court on Wednesday witnessed rumblings of discontent from certain quarters of the “distressed” airline sector about the government’s air fare refund policy for flights cancelled during the pandemic lockdown.
In a hearing before a three-judge Bench led by Justice Ashok Bhushan, senior advocate Pinaki Misra, for Vistara, submitted that the proposed policy was suggested without actually consulting the airlines. He said the framework of the policy was created in one or two meetings, the last of which was a “cursory” one.
The proposed policy suggests immediate refund for air tickets booked during lockdown. For others, a credit shell would be opened in the names of passengers and operated till March 31, 2021. Passengers can fly any route using the credit, which is also transferable. If the credit is not used, airlines have to mandatorily refund the ticket money to the passengers by the end of March next year. Besides, there is a monthly .75% incentive if the credit is left untouched.
Monthly incentive
Mr. Misra said the .75% monthly incentive would add up to nine per cent annually. “Why do we have to pay interest when every other distressed sector is getting a moratorium?” he asked.
Senior advocate Aryama Sundaram, for Air Passengers Association, said there was no question of granting moratorium as this issue pertained to payment to individuals. Mr. Sundaram, along with senior advocate Sanjay Hegde and advocate Jose Abraham, said they were “by and large” satisfied with the refund policy.
Solicitor General Tushar Mehta said this was only a “broad framework” and specific problems would be taken care of as and when they crop up or were brought to the notice of the government.
Senior advocate Mukul Rohatgi, for Indigo, said there was “no need to worry too much.”
But Mr. Misra said the policy chalked out by the government and the Directorate General Civil Aviation to immediately refund passengers did not make sense when the latter were happy with long duration credit shells.
Advocate Liz Mathew said passengers should be given a choice between immediate refund and credit shell, especially senior citizens who were non-frequent flyers.
Senior advocate Arvind Datar, for GoAir, raised the spectre of collapse of the airline industry with its 30,000 to 40,000 employees. He voiced doubts about whether airlines would have the necessary budget at their disposal.
In the virtual court hearing, Mr. Hegde asked why the policy was silent about refund to Indian passengers whose incoming flights were cancelled during lockdown. He said only cancelled outgoing flights were covered in the policy.
Senior advocate Pallav Sisodia raised the concern of tour operators who had done advanced air bookings for their clients using their own capital. They would be at the mercy of their clients as credit shells would be opened in the latter’s names.
The court scheduled the case for hearing on October 25.
