By Shivanand Pandit
With complaints about airline ticket cancellations and refund issues on the rise, the Directorate General of Civil Aviation (DGCA) has proposed a set of more customer-friendly regulations. While these changes aim to improve passenger convenience, airlines could experience greater unpredictability in early bookings. The civil aviation regulator has sought feedback from the public and stakeholders until November 30 before finalising the revised Civil Aviation Requirements. Once enforced, these changes are expected to offer passengers enhanced flexibility and stronger safeguards against arbitrary airline policies.
Under the current rules, passengers are allowed to cancel or modify a ticket within 24 hours of booking without incurring any extra fees, as long as the flight is scheduled at least seven days later. The DGCA now proposes to extend this “look-in period” to 48 hours, giving travellers greater flexibility. Beyond this 48-hour window, the usual cancellation charges would apply. During the extended period, passengers can cancel or modify their tickets without incurring any penalty, except for the fare difference if they choose a different flight. However, this benefit would not apply if the flight is scheduled to depart within five days (for domestic) or 15 days (for international) from the date of booking. Effectively, the new proposal doubles the free cancellation period from 24 to 48 hours and reduces the advance booking requirement from seven to five days for domestic flights. This allows passengers to correct mistakes, such as misspelled names, incorrect travel dates, or flight timings, without incurring additional charges or rebooking fees. Moreover, it shields passengers from price fluctuations — if a cheaper fare becomes available within the grace period, they can cancel the earlier ticket for a full refund and rebook at the lower price.
For the first time, the DGCA’s draft guidelines explicitly make airlines directly responsible for issuing refunds, even for tickets booked through travel agents or online portals. The draft clarifies that these agents function merely as “appointed representatives” of the airline. At present, passengers are often caught in a loop between airlines and agents when seeking refunds, while the Ministry of Civil Aviation’s website continues to advise them to “Kindly approach your travel agent.” The proposed rules aim to end this confusion by requiring airlines to process and complete refunds within 21 working days.
The DGCA circular has upheld the existing rule permitting passengers to correct their names within 24 hours of booking at no extra cost, provided the ticket was booked directly through the airline’s website. This clause has been retained in the draft to promote clarity and consistency. The circular also reaffirmed that retaining refund amounts in a credit shell must be entirely at the passenger’s discretion and cannot be a default practice by airlines. A credit shell refers to a credit note issued against a cancelled PNR, which can be used by the same traveller for a future booking. Credit shells gained prominence during the COVID-19 lockdown when flight operations were suspended.
The proposed 48-hour look-in period positions India ahead of many countries globally, as most international norms — including those in the United States, the United Arab Emirates, and Canada — allow passengers only 24 hours to cancel bookings free of charge. Under this proposal, foreign airlines operating to or from India will be required to process refunds according to the regulations of their country of origin. The DGCA further emphasized that airlines must refund all statutory taxes, as well as User Development Fees (UDF), Airport Development Fees (ADF), and Passenger Service Fees (PSF) to passengers in cases of ticket cancellation, non-utilisation, or no-show. Importantly, this rule will apply across all fare categories, including promotional and special fares, even when the base fare is non-refundable. Currently, IndiGo levies a cancellation charge of ₹3,999 to ₹4,999 for domestic flights when the cancellation occurs after the cut-off period, depending on how close it is to the travel date. For international routes, the cancellation fee ranges between ₹6,500 and ₹10,000. Air India imposes similar charges, aligning with IndiGo’s structure.
Although the move is primarily aimed at improving passenger convenience, it may simultaneously create new operational and financial challenges for airlines. The introduction of a longer “no-penalty look-in period” during which passengers can cancel or modify bookings without incurring charges could lead to increased fluctuations in early-stage bookings. Travellers might reserve seats well in advance and later cancel them freely, causing airlines to face heightened uncertainty in managing seat inventory and predicting revenues. This unpredictability could particularly affect low-cost carriers, which rely heavily on advance sales to optimise aircraft capacity and cash flow. Managing cancellations and re-bookings within this extended window may temporarily disrupt revenue planning and yield management strategies. On the positive side, the reform could result in better seat utilisation closer to the date of departure, as previously blocked seats become available for last-minute travellers. In the long run, despite short-term adjustments, this policy has the potential to strengthen consumer confidence, stimulate advance reservations, and align India’s aviation practices with globally recognised, passenger-friendly standards.
A much-needed reform
The draft regulations issued by the DGCA concerning the refund of airline tickets upon cancellation mark a long-overdue and much-needed reform in India’s aviation sector. These measures are expected to bring significant relief to air travellers, given that nearly one-fifth of all complaints received by the DGCA pertain to delayed refunds, unreasonably high cancellation fees, and the practice of adjusting cancelled tickets against future bookings. For far too long, the absence of transparency and standardised norms in this area has caused frustration among passengers. The new rules, which are in line with global best practices, seek to establish minimum uniform standards while allowing airlines the flexibility to offer more customer-friendly terms if they wish. This balance is likely to work in favour of passengers, especially in an environment of intense competition among carriers.
A particularly commendable feature of the draft is the introduction of a 48-hour “look-in” window, during which passengers may cancel or modify their tickets without incurring any additional cost. This facility—superior even to the 24-hour window available in the US and Europe—will be invaluable for those whose travel plans change unexpectedly or who make inadvertent booking errors. Importantly, the DGCA has proposed that this benefit apply to tickets purchased both directly from airlines and through travel agents, thereby extending the protection to a wider group of travellers. The proposed norms also enhance transparency by requiring airlines to clearly specify the refundable amount and provide a detailed break-up either on the ticket itself or on a form accompanying it. Mandating airlines to display their refund policies prominently on their websites is another welcome step, as it will enable passengers to make informed choices by comparing policies across carriers.
However, the ceiling for cancellation charges—set at the level of the basic fare plus fuel surcharge—appears somewhat steep, since it effectively allows airlines to retain nearly the entire ticket cost. A more balanced approach would have been to reduce this cap, particularly for cancellations made at least 48 hours prior to departure, to around 80% of the basic fare and fuel surcharge. Such a provision would have ensured that passengers are not unduly penalised, especially when the chances of an empty seat going unsold are minimal on busy routes. Another positive feature of the proposed rules is the introduction of a clear time frame for refund processing. This will help curb the persistent problem of delayed refunds. Furthermore, by making airlines responsible for ensuring that travel agents return the refunded amount within 21 working days, the DGCA has addressed a long-standing grey area where passengers often found themselves caught between the airline and the travel agent, each deflecting responsibility.
Overall, these draft regulations represent a progressive and customer-centric initiative that promises to make India’s civil aviation sector more transparent, accountable, and aligned with international standards. While a few provisions—especially those concerning cancellation charges—may need refinement, the initiative is a commendable stride towards safeguarding passenger rights and restoring consumer confidence in air travel.
