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Thursday, 01 October, 2020, 16 : 23 PM [IST]

SC on Refunds: TAAI fears complete collapse of airlines already starting at an existential crisis

The oldest travel trade body cries foul over SC’s "status quo" verdict on negligible interest to be paid by airlines for delay and ambiguity of the effective date for agents to issue refunds. Worse, TAAI fears complete collapse of airlines already staring at an existential crisis for being forced to pay refunds.
Reacting to today’s Supreme Court ruling directing airlines to refund travel agents for tickets booked through them while accepting DGCA’s recommendation, the Travel Agents Association of India (TAAI) says this verdict maintains status quo to the previous suggestion by aviation regulator. 

“Nothing really to appease our challenges and multiple communications and meetings had with MoCA and the airlines in the matter, said Jyoti Mayal, President, TAAI. 

“The airlines mostly were giving credit shells. If they were struggling with cash and they will continue to do so stating their inability. Only respite from the earlier direction is that the credit shells will be given to agents if booked through them and not the customer as some airlines were doing,” she added.

Moreover, TAAI fears the worst on the submission of certain airlines, that they shall shutdown in case pressured for refunds. “What if airline/s defaults before 31st March 2021 who is going to be responsible? The Government needs to ensure appropriate assurances/guarantee from the airline/s concerned so as to secure the monies,” stated Jay Bhatia, Vice President, TAAI. Agents pay advances into float accounts of the airlines and it is their right to claim the monies back for un-utilised funds/non-ticketed balances lying with the airlines, Bhatia argues.

During multiple meetings with MoCA, TAAI had demanded interest on delayed refunds. “The Hon SC has directed 0.5% extra top-up every month on the face-value of the ticket, up to 30th June, 2020 and thereafter 0.75% up to 31st March 2021. This is much below the standard bank interest rates. Agents and customers are struggling with cash crunch and basic interest paid to banks is at much higher rates. The agent fraternity needed total cash refunds. We the travel agents have become financiers for the airlines.”

Pointing out lack of clarity in the verdict, Bhatia added, “It is also important to note that there is an ambiguity on the credit shell through agents to remain up to 31st March 2021, thereafter refund needs to be paid. The date for complying with refunds post that is not given,” Bhatia added.

Further, Mayal stated that DGCA has washed hands on the SOTO (Sold Outside Ticketed Outside) ticket refunds by airline/s. “There has been no direction on the refunds for groups and series bookings done by the agents with the airlines. The Hon’able SC too has not commented on that at all,” Mayal added.

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