Knowing your air passenger rights amid the ongoing Covid-19 crisis

Back to Aviation Law Committee publications

Poonam Verma, Partner, J. Sagar Associates, India, ND

Sakshi Kapoor, Associate, J. Sagar Associates, India, ND

The Indian aviation sector seems to be caught in a perfect storm of shrinking profits; high debt; cut-throat competition; and a fall in passenger traffic due to limited scheduling of flights, as part of government curtailment norms to combat the ongoing Covid-19 crisis. For air passengers, all this has meant multiple flight cancellations and disruptions over the past months. This is where knowing your air passenger rights becomes more relevant: these rights involve specific laws that support travellers and advocate for protection and compensation when passengers face such flight disruptions.

The existing legal regime, which is governed by Civil Aviation Requirements (CAR) (issued by DGCA) and the Passenger Charter of Rights (‘Charter’) (issued by the Ministry of Civil Aviation in February 2019), lays out the entitlements for impacted passengers. Faced with widespread cancellations and delays, passengers can generally seek recourse from airlines under the CAR issued by the DGCA under Section 3, Series M, Part IV, revised 6 August 2010. Amongst other things, this provides for compensation and facilities to be provided to such passengers affected by delays and cancellations of flights and also those denied boarding. The CAR and the Charter recognise the air passenger’s rights and aim to protect the interests of air passengers, so that in case of any violation of the provisions of the applicable CAR, appropriate enforcement action can be taken against the violator airline; the violation can be treated as deficiency of service; and the passenger can approach an appropriate legal forum for remedy.

As per the Charter, if a passenger is denied boarding due to overbooking of a flight, he/ she would be entitled to compensation from the airline, if he or she is not given an alternate flight within one hour of the original flight’s departure.  Airlines also have to refund the total ticket cost to passengers where it is expected that a flight will be delayed by more than six hours, or offer an alternate flight to the passengers. The Charter also entitles the passengers to arrange and alternative flight or get a full refund, where an airline fails to inform passengers about a flight cancellation within less than two weeks of that flight’s departure.

Further, as per the Charter, airlines must inform passengers about flight cancellation 24 hours before the scheduled departure time. In this case, the customers should be offered either a full refund of the ticket amount or an alternative flight. If the passenger is not informed 24 hours before departure, or if she misses a connecting flight due to cancellation without it being the passenger’s fault, the airline has to offer compensation. In the event of cancellation of tickets, under the Charter passengers have the right to receive a refund of even the statutory taxes, user development and passenger services fees that are imposed by airlines.

According to aviation watchdog DGCA’s yearly statistics, there was a marginal increase of ten per cent in the compensation paid by airlines to passengers for flight delays, cancellations and for denying boarding between 2018 and 2019. This comes after the Ministry of Civil Aviation introduced the Charter in 2019. However, there is still a gap between the passengers who have suffered on account of the flight disruptions and number of complaints that have been received from the passengers. This could be because not all air passengers are aware of their rights and many do not register complaints as they may not find the present system for redressing complaints to approachable.

In a bid to make the redressal of the passenger complaints artificial intelligence driven and the mechanism for redressal more approachable for passengers, the government has also introduced an online customer grievance portal, AirSewa, which sought to reset the terms of service in favour of the passenger. However, it must be noted here that this online portal does not provide for a penal action against the violator airline and there is no tribunal overseeing AirSewa, which weakens its effectiveness. One of the major concerns surrounding this portal is its inability so far to address the grievances of the passengers in a time-bound manner, which is a major drawback — especially at the present time, when there is already a lot of anxiety among the passengers with respect to the redressal of their claims and uncertainty surrounding their air rights.

Even though the present legal regime prescribes a detailed list of air passenger rights, however, in the wake of these unprecedented times, when the world is grappling with the catastrophic Covid-19 pandemic, airlines are struggling for financial survival and returning of the passengers money for cancelled flights could cause financial catastrophe, the question arises as to what happens to air passenger rights with respect to compensation and refund of flight tickets cancelled due to Covid-19. Both the CAR and the Charter carve out an exception for the obligation of airlines to pay compensation in cases where cancellations and delays have been caused by extraordinary circumstance(s) beyond the control of the airline, that is, a force majeure event. Cancellation of all domestic and international flight services across the nation due to government-imposed lockdown will be considered a force majeure event. Hence, passengers cannot claim compensation in this regard.

While compensation may not be claimed by passengers, airlines are still liable to make full refund of air tickets which were cancelled through no fault of the passengers during the lockdown period. After the flight cancellations during the recent crisis, airlines (instead of providing an option of a full cash refund of tickets to passengers) were using the credit shell mechanism to park money which was valid up to one year. The passengers could use the credit shell within that period to book tickets later, once the flights resumed. The shells helped airlines conserve cash, especially during a time when their entire fleet was grounded. However, this practice is in violation of the CAR Section 3 – Air Transport Series ‘M’, Part II issue I, dated 22 May 2008 wherein it is stated 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’.

A non-profit organisation, Pravasi Legal Cell, had first brought the issue of refund of cancelled tickets to the Supreme Court’s notice by filing a Writ Petition in April. It was argued that passengers who did not intend to avail the credit shell offered by airlines within a stipulated time period should be given a full refund. Recently, in a major relief to the passengers, DGCA has mooted the formula of refund of air tickets before the Supreme Court by stating that the non-refund of fares or creation of an ‘involuntary credit shell’ by airlines violates of aviation law and policy. The matter is presently pending before the Supreme Court and is likely to be taken up for the hearing towards the end of September 2020. This matter will decide the way that refunds are made to the passengers for flights cancelled due to the Covid-19 outbreak.

There is no doubt that Covid-19 has waged a war on air passenger rights and, hence, there is a need to devise a solution that takes care of both the airlines, who are facing financial crisis and passengers, whose rights are at stake. However, in doing so the rights of air passengers under the present legal regime cannot be curtailed. As the international organisation IATA indicates, ‘passengers have the right to get their money’. The modalities for refunds/ payments, that is, either by extending the credit shell period or by giving a full cash refund for the cancelled air tickets, can be examined in a pragmatic manner, within the confines of the law in place.

While the recovery of the aviation sector may still take some time, it is important that passengers, as responsible travellers, become more informed of their rights in order to ensure safer air travel and avoid making the air travel experience dispiriting.

Back to Aviation Law Committee publications