In a recent legal case concerning airline refund policies during the pandemic, the court’s analysis focused on balancing the interests of passengers and airlines. The court’s decision provides insights into the enforcement of Civil Aviation Requirements and the implications of issuing credit shells. Find out more about the legal intricacies surrounding airline refunds amidst the ongoing global crisis.
Arguments
- Petitioners allege that airlines are not refunding the full amount for cancelled flights, instead providing credit shells.
- Various counsels argue for immediate refunds for all passengers regardless of booking mode.
- Travel agents also demand credit shells in their name for tickets booked on behalf of passengers.
- Allegations state that airlines are not following Civil Aviation Requirements (CAR) for refunds.
- Government’s O.M. dated 16.04.2020 is mentioned, claiming it indirectly approves airlines’ practice of providing credit shells.
- Petitioners seek directions for full refunds for all tickets booked at any time for travel.
- Writ petition by Air Passengers Association of India also seeks refunds for cancelled flights, citing violation of CARs by airlines.
- Credit shells proposed to be issued in the name of passengers only, with refunds to agents if not utilized by 31 March 2021.
- Supplementary affidavit clarifies that credit shells will not be issued in the name of agents.
- Formulations proposed by respondent airlines in meetings with stakeholders are claimed to substantially resolve grievances.
- Certain issues remain unresolved according to arguments raised during the hearing.
- Writ petitions filed by multiple parties seeking quashing of O.M. dated 16.04.2020 by Ministry of Civil Aviation and declaration of denial of refund by Air India Ltd. as illegal.
- Allegations of discrimination for passengers who booked tickets during lockdown period versus those who booked earlier.
- Petitioners argue ‘Credit Shell’ mechanism offered instead of refunds contrary to CAR regulations and results in unjust enrichment for airlines.
- Petitioners seek full refunds for tickets booked prior to lockdown period based on ambiguity in O.M. dated 16.04.2020.
- Travel industry facing significant financial losses due to COVID-19 pandemic, leading to liquidity crunch for airlines.
- Request made to extend the time to encash credit shell until 31 March 2022 to address financial balance.
- Global predictions of airline revenue drops, passenger demand falls, GDP contraction, and job losses due to COVID-19 impact.
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Analysis
- The Ministry of Civil Aviation issued an advisory in April 2020 to address grievances of passengers and airlines amidst the pandemic.
- Formulations were proposed for different scenarios of ticket bookings and refunds, specifying timelines and procedures.
- The directions included immediate refunds for certain cases and issuance of credit shells for others.
- An incentive mechanism was established for delays in credit shell utilization.
- Strict enforcement of Civil Aviation Requirements was considered to potentially impact airline operations and cash flow.
- The formulations were accepted by the majority of stakeholders and recommended for implementation.
- The court disposed of the cases with directions for refunds and credit shell utilization, ensuring passenger and airline interests were balanced.
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Decision
- The credit shell issued to passengers shall be transferable and can be used until March 31, 2021.
- A notice has been ordered to be issued to other respondents.
- The court, in response to the COVID-19 pandemic, addressed issues raised by stakeholders and passed the order on June 12, 2020.
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Case Title: PRAVASI LEGAL CELL Vs. UNION OF INDIA (2020 INSC 575)
Case Number: W.P.(C) No.-001131 / 2020
