Civil Aviation ministry may reform cancellation policy

Even as the new reforms drafted by the Civil Aviation Ministry on name change and free cancellation of airline tickets within 24 hours of booking look like bringing relief to the passengers, the shortcomings in the reforms make them apprehensive.

The draft directs airlines to print cancellation charges on the ticket, and that airlines and their agents together should not, under any circumstances, levy cancellation charge more than the base fare plus fuel surcharge.

However, the airline ticketing fraternity asked why a passenger has to pay fuel charges when there is no fuel burn-off? And, how the airline can define the fuel burn-off percentage as the proportion of fuel burnt for carrying him?

In a representation forwarded to the Civil Aviation Ministry, Biji Eapen, National President, IATA Agents Association of India, said, the fuel charges cannot become a part of the cancellation charges and any attempt to include this in the basic fare without merging both fare and fuel charges together is illegal and a total violation of the Law. “So we request the Ministry of Civil Aviation to review and amend the draft to specify that, cancellation charges under any circumstances shouldn’t be more than the base fare,” he said.

According to them, of the various components that make up the cost of an airline ticket, the base fare and fuel surcharge go to the airline and the others to the government and the airport operator.

Hence, the base fare is the price of airline ticket before fees, taxes and any surcharges are added. Even the Aircraft Rules 1937, Rule 3 Clause 54A also defines explicitly that “tariff” is the combination of fare, fees and other taxes.

Lately, the domestic segment witnessed majority of Indian carriers rewrapped base fare and fuel charges together as a single component under various tax codes. Carriers such as Air India, Vistara and SpiceJet offer base fare together with fuel as one unit.

For instance, Air India Thiruvananthapuram/Delhi route exhibits tariff Rs 9,385 with the base fare Rs 8,150 inclusive of fuel, whereas Jet Airways and IndiGo display separately (Jet Rs 6,567 as base fare & Rs 1,800 fuel surcharge and IndiGo Rs 3,730 as base fare and Rs 400 fuel surcharge).

So charging a cancellation fee more than the base fare is quite illogical. When a passenger is not travelling, there is no fuel consumption required. Hence, when the carrier is not consuming or burning any “fuel or gasoline” on the account of that passenger’s carriage, the airline cannot retain such and the unused “fuel charge” portion should be refunded, they said.

Curiously, the airlines in the country began charging this component on each ticket to account for volatile fuel prices from 2005. Globally, majority of the airlines includes fuel charge in the original price of a ticket and adds on a fuel surcharge during the booking process. Commenting on the issue, an aviation analyst and senior officer close to Air India said the profit of the airlines often depend on the last 10-15 seats booked in each trips.

Earlier, the airlines were allowed to take overbooking anticipating cancellations, but the practice was stopped recently. So if around 10-15 people cancel their tickets in the last minute, it would be difficult for airlines to register operational profit in the trip as there is no reduction in other operational charges of the airlines.

So the ministry seems to have taken the decision after vetting the issue from all angles, he said. Other point being raised by the agents is the fuel surcharge introduced when the fuel prices skyrocketed during 2005 and it was not abolished when oil prices crashed.

He asked whether there is any reduction in petrol/diesel prices even after the oil prices nosedived. So why airlines are blamed for charging fuel surcharge on aviation turbine fuel when the Centre is yet to take a clear decision on this, he asked.

You might also like



WelcomHeritage recently opened a new property, Mani Mansion under its portfolio of Heritage Hotels. Mani Mansion is a 94 year old heritage property that was once home to the Dalal


Spain tops the 2017 edition of the Travel & Tourism competitiveness index for the second time

In 2017, Spain continues leading the Travel & Tourism Competitiveness Index (TTCI) ranking published by the World Economic Forum in April 5th. This is the second time that the WEF


Hotel Sahara Star offers Independence Day deal

Spoil yourself with an assortment of delectable food Hotel Sahara Star invites every gourmand in town this Independence Day for the ultimate luxury dining experience with some exciting offers. To


India to hold first ever India Tourism Mart

The aim is to double tourist footfall in next three years. To increase tourist footfalls, India will organise its first-ever India Tourism Mart (ITM) for three days from September 16.


Qatar Airways Cargo welcomes latest Boeing plane

Qatar Airways Cargo has welcomed the seventh Airbus A330F and first Boeing 747F nose loader aircraft to its fleet at its home base in Hamad International Airport, Doha. Continuing on


OYO enjoys robust business growth

OYO enjoys robust business growth, witnesses huge market potential in China while continuing its dominance in India. OYO Hotels now a 1,000 hotel strong chain in China covering 28 provinces,


Thailand invites the world to enjoy the glorious Tulips of Chaiyaphum

The Tourism Authority of Thailand (TAT) is inviting local and international tourists to enjoy one of Thailand’s most amazing natural sights, the famous Dok Krachiao – or Siam Tulips – in Bloom


Airbus hikes list-prices by two per cent

This move could impact airlines in India expecting to receive planes going ahead. Airbus on Monday said it has increased the average list-prices of its aircraft by 2 per cent


Thomas Cook India witnesses 20% growth from Telangana

Opens new branch in Hyderabad to leverage strong growth potential Thomas Cook (India) Ltd. opened a new branch at Jubilee Hills, Hyderabad to leverage the growing potential of Telangana State.


One&Only Dubai welcomes guests to celebrate Ramadan in true Arabic tradition

This Ramadan, guests and visitors alike can experience the very best of Arabian hospitality at One&Only resorts in Dubai. One&Only Royal Mirage, the chic and buzzing beach resort overlooking Palm


Lords Hotels & Resorts observes World Blood Donors Day

The Hotel Chain ties up with local Municipal Blood Banks & Raises Awareness on Emergency Preparedness India’s leading mid-market hospitality chain – Lords Hotels & Resorts observed World Blood Donor


Clarks Inn- the fastest growing hotel company in India

Company’s portfolio count stands at 80 hotel properties, including over 40 in operation, across 17 states in India and one in Nepal in just over 11 years of operation. Very