The Supreme Court on Thursday directed airlines to refund within three weeks to all passengers, domestic and international, the prices of tickets cancelled during the lockdown between March 25 and May 24.

The court said that for tickets cancelled during the pandemic but outside the lockdown period, an airline would be allowed in case of “financial distress” to offer a credit shell that a passenger would be able to cash till March 31 next year.

The passenger will be able to use the credit shell, the value of which will be the same as that of the fare plus a monthly interest, on any route of their choice or transfer the voucher to some other person or travel agent. If the credit shell is not used by the deadline, the airline will have to refund the price of the cancelled ticket to the passenger.

Some airlines had wanted the credit shell facility to be extended till March 31, 2022, but the court rejected the plea.

The bench of Justices Ashok Bhushan, R. Subhash Reddy and M.R. Shah passed the directives while disposing of petitions filed by the NGO Pravasi Legal and others challenging airlines’ refusal to refund the fares for tickets cancelled during the pandemic.

Highlights of the judgment:

• If a passenger has booked a ticket during the lockdown period (March 25 to May 24, 2020) for domestic or international travel during the lockdown period, the airline shall refund the full amount without any cancellation charges. The refund shall be made within a period of three weeks.
• If the cancelled ticket had been booked through a travel agent, the airline will have to refund the agent, who will immediately transfer the money to the passenger.
• Passengers who had booked tickets during the pandemic but for travel after May 24 will have to be refunded in keeping with provisions of the Civil Aviation Requirements. The court did not elaborate on this.
• Both domestic and foreign carriers will have to abide by the court order.
• In all other cases of cancellation during the pandemic, the airlines will have to refund passengers within 15 days.

“If on account of financial distress, any airline/ airlines are not able to do so, they shall provide a credit shell, equal to the amount of the fare collected, in the name of the passenger when the booking is done either directly by the passenger or through travel agent so as to consume the same on or before March 31, 2021,” the court said.

This facility will be available only if the flight cancellation is outside the lockdown period, the court made it clear.

“It is open to the passenger either to utilise such credit shell up to March 31, 2021, on any route of his choice or the passenger can transfer the credit shell to any person including the travel agent through whom he/ she had booked the ticket and the airlines shall honour such a transfer by devising a mechanism to facilitate such a transfer,” Justice Reddy said.

For tickets booked or transferred to a third party through an agent, refund or credit shell transactions will have to be done through the agent. Also, the money will be refunded to the account from which the airline had received the booking amount.

Airlines opting for the credit shell will have to pay an interest of 0.5 per cent on the ticket amount every month for tickets booked between March 25 and June 30. The interest rate for subsequent months till March 2021 will be 0.75 per cent.

The court said the suggestions and formulations, arrived at during a meeting of the civil aviation ministry and the directorate-general of civil aviation, were acceptable to the majority of the stakeholders and would have to be implemented in letter and spirit.

“We also feel that such formulations are workable solutions in these peculiar circumstances which are prevailing in the country,” the bench said.