Don’t make refunds mandatory, airlines may collapse, Supreme Court told

NEW DELHI:India’s private airlines on Wednesday told the Supreme Court it should not be mandatory to refund the passengers, as their revenues have dropped sharply, and many customers have accepted their offer.

Senior advocate Arvind Datar, appearing for GoAir, submitted before a bench comprising Justices Ashok Bhushan, R. Subhash Reddy and M.R. Shah that the airline is on the verge of collapsing, therefore it should not be mandatory to refund the passengers.

“We need to have funds at our disposal to pay,” he said, informing the top court that profits have been reduced drastically as an impact of the lockdown and insisted that it is a matter of collapse for the airlines, and there are nearly 30,000 to 40,000 employees in this sector.

The Directorate General of Civil Aviation (DGCA) has filed an affidavit in the top court, stating that people who had booked air tickets during the lockdown are entitled to immediate refunds, and in case of tickets booked prior to the lockdown up to May 24, the refund would be governed by the credit shell and incentive scheme.

Senior advocate Pinaki Misra, representing Air Vistara and AirAsia, said the DGCA’s approach is ‘one size glove fits all’ and the aviation regulator cannot say the airlines must refund.

Misra argued that if passengers have happily accepted the airlines’ offer, then how can they be compelled to pay a refund.

“I cannot pay 9 percent interest on the refund amount, and if this continues, then airlines may need a moratorium,” he submitted.

Solicitor General Tushar Mehta, appearing for Ministry of Civil Aviation and DGCA, explained the refund scheme to the bench and submitted that airlines are bound by the the Centre’s proposal.

He insisted the Centre has taken the interests of both passengers and airlines into consideration, and that it was the best the Centre could do.

The bench said that it is only concerned with refunds and non-refunds of money for tickets booked during the lockdown period.

The top court was hearing a plea filed by NGO ‘Pravasi Legal Cell’, through advocate Jose Abraham, which has raised the issue of refund on air tickets during the lockdown period.

The bench asked the Centre to clarify by Friday the modalities of air tickets refund to the passengers and travel agents against the backdrop of cancellation of flights during the lockdown period.

The bench then queried Mehta on the refunds to a travel agent, who has already paid to the airlines for the tickets booked. Mehta said he will file another affidavit by September 25.


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