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Thursday, 01 October, 2020, 19 : 00 PM [IST]

TAFI hails SC verdict on refunds; terms it as a move for Ease of Doing Business

With the Supreme Court recognising travel agents as integral to the aviation business in its judgement today directing airlines to issue refunds to them, the Travel Agents Federation of India (TAFI) has termed it as a landmark verdict. “We are very happy that we filed a separate writ petition in the SC, besides intervening in the petition by Delhi-based Pravasi Legal Cell. Taking cognizance of our petition, the apex court has directed refunds to be issued in cash, and in certain cases credit shell will be issued, all through travel agents,” said Pradip Lulla, President, TAFI.

Explaining the order, Lulla said that if a passenger has booked his ticket through a travel agent and doesn't want to avail the credit shell facility, then the court order allows the agent to offer it to a third party. "It's a positive step and also supports Ease of Doing Business." The validity of the credit shell is up to March 31, 2021, post which the airline has to issue cash refund if the passenger doesn’t avail the facility.

Throwing light on the verdict, Lulla stated that the Supreme Court has recognised the role of travel agents in the industry. "The airlines argued in the court that since their business has reached nadir due to lockdown and if they have to refund cash to travel agents, they will have to shut down operations. The Supreme Court strongly refuted this, and said passengers have nothing to do with an airline's financial health," said Lulla.

Advocate Harshavardhan Bhende who filed the writ petition on behalf of TAFI in the SC, added, “This verdict will lay a strong foundation of the role of a travel agent. Moreover, the order clearly states that if the credit shell is not utilised until March 30, 2021 by the passenger, the airline has to refund in cash, a win-win situation for airlines and passengers alike.” 

Replying to a specific question from TravelBiz Monitor on the verdict leading to the collapse of certain LCCs (GoAir & SpiceJet have already contended that they will have to shutdown if forced to issue refunds instead of credit shell), Sunil Uttam, Secretary, TAFI Pune Chapter said, “IndiGo has a very transparent refund policy and that is why it enjoys 60% market share in India. It has adhered to its policy and is issuing refunds. However, at the end it is all about business credibility, and airlines need to formulate clear-cut refund policy to stay in the business. The travel agent can’t suffer because of the airline defaulting on payments.”
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