For some time now, the airline ticket booking business in India has going through turmoil. As airlines are facing a tough time financially, they have told agents that tickets booked by agents will no longer get commission to the agents. The way that the business used to go was, when a ticket was booked by an agent for an airline, the agent used to get a commission for the booking, approx Rs. 350 to Rs. 500. But with the decision to do away with the commissions, airlines faced a revolt from these agents who threatened to boycott them. Having said that, consumers should have benefited from this decision, since the fee should now be deducted from the airline tickets. However, in an unprecedented action, airlines are still charging consumers the same amount, apparently under pressure from agents who don’t want airlines to start selling at a reduced rate, even if the tickets are being sold directly:

Aviation fuel may have got cheaper on Saturday, but flying has become much more expensive. India’s three full service airlines — AI, Jet and Kingfisher — started levying a transaction surcharge on tickets sold by them. This surcharge is exactly similar to the fee that agents now charge — Rs 350 and Rs 500 for economy and business-class domestic flights and between Rs 1,200 to Rs 10,000 for international ones.
This means that there’s no escaping this additional charge whether people buy tickets from agents who moved over to the new system after airlines stopped paying them any commission from Saturday, or directly from the carriers. A senior airline official claimed that this was done under pressure from travel agents. “Agents told us that if we sell tickets cheaper than them, agencies would find it hard to get business. So we had no option as 85% of all tickets are sold by agents and they have threatened to boycott the three biggest Indian airlines,” the official said, clearly happy that airlines will pocket this entire amount.

This is an act that is vehemently anti-customer. If the airlines are having a commercial dispute with their agents, why should the customer have to pay extra; the airline is happy since it gets additional payment. The agent is happy since there is no under-cutting of their business and customers don’t feel any difference between buying the ticket from the airline and from the agent.

This is a consumer court judgment that will surely be appealed. Imagine the world of a person whose father died in a separate city (home town), and he had to rush home through connecting flights. And then the flight got delayed in landing, which means that the connecting flight was missed. He could not afford to miss the funeral, so he had to hire a taxi to rush home, costing him an additional Rs. 3500 for the taxi. Once he had completed the necessary formalities at the funeral, he wanted to know as to why the flight was late, especially when he was earlier assured that he would get the connecting flight:

Landing later than the scheduled time at Delhi airport has cost dear to Jet Lite. UT consumer forum directed the airlines to pay Rs 5,000 as compensation to Dr Mahesh Hukmani of Sector 19, who missed his connecting flight to Jaipur. He was to attend his father’s funeral in Jaipur on February 4, 2008.
Claiming that due to delay he had to hire a taxi for Rs 3,500 to reach Jaipur, Hukmani moved city’s consumer court. He added that on his return, when he contacted Jet Lite officials, they failed to give any satisfactory reply. Jet Lite in its reply pleaded that delay in departure occurred due to a technical snag, which was detected by the pilot, and in order to avoid any mishappening, the flight took around 40 minutes to remove the snag.

The airline would surely appeal against this ruling, since multiple low cost airlines get delayed often for no apparent reason, and when you ask their staff, they are unable to give any convincing reasons. More people would use such a ruling to push for their claims.

The whole concept of low-cost airlines in India demands a new form of business where costs are minimized. Hence, over the years, we have seen airlines which are no-frills (such as Deccan, Spicejet, Go, Indogo, etc), with no newspapers and magazines, where no food is served / food has to be bought, and so on. Such airlines have brought the total cost of travelling down tremendously, letting people travel by with cheap tickets rather than the very expensive tickets that had to be bought earlier from full-fare airlines such as Indian Airlines and Jet Airlines would be charging; these full fare airlines would provide a much better level of service, but would also charge a much higher fare, sometimes 3-4 times the fare charged by these low-cost airlines.
However, at the same time, some of the practices that they followed to save money were anti-customer. If a ticket was cancelled, they would not refund the whole amount, or in really bad cases, the airline would give a voucher to travel on a later date but would not actually give the money back; in some cases, the refund would take a really long to come through and only after much follow-up from the traveler. In order to change some of these practices, the Directorate General of Civil Aviation (DGCA) has made it binding on airlines to refund the money and not follow a practise of proving a voucher instead. However, airlines have been loath to do, making the DGCA threaten to take action:

Some low cost carriers (LCC) follow a controversial policy of no refunds by insisting that those who cancel their tickets fly again within a certain period of time in lieu of the refund. The DGCA had some months back issued a rule that airlines must give the option of both a refund and future travel to those who cancel tickets in time.
But despite this legal requirement, some LCCs are still not refunding money and asking passengers to travel again within a cutoff period. “We have been receiving such complaints from the public. It’s our constitutional obligation to ensure that laid down rules and regulations are followed,” DGCA chief Kanu Gohain said. The agency is going to seek an explanation from defiant airlines this week by issuing notices to them and threatening stern action if they don’t start following the rule of refund.

Airlines have been protesting this rule, but the fact is that not allowing customers a refund when they have not availed of a service, and used a quite normal procedure of cancellation is a violation of customer service norms, and cannot be allowed just because it works in the airline’s favor. The DGCA should continue to enforce this rule, and customers, if presented a voucher by an airline rather than a refund should protest to the airline, and petition the DGCA, as well as consumer forums. They should also refuse to accept any such voucher, and point out to the airline that this matter will go to a consumer forum.

This was very surprising. I was trying to book a ticket from Srinagar back to Delhi for around the 3rd week of June, and started with the regular websites that I was using - Yatra.com and MakemyTrip.com. They both seemed to have around the same lowest fare, on Spicejet. So this seemed fine and I was about to go ahead and make the booking, but then a thought struck about going to the website of the airline directly - in this case, SpiceJet.com
This ticket was being booked for 3 people, and hence the total amount quoted for the booking on Yatra was around Rs. 12,000 (slightly less than that). So imagine my surprise when I went to the airline website and got the ticket for 3 people at around Rs. 1200 less (around Rs. 10,800). This is a decent amount of saving, and not something to mock at, and so set a policy for next time to go to the website of the respective airline to check the prices over there as well.
I wonder whether this was a mistake, or did the website such as Yatra charge extra on some specific times, I can’t imagine them being successful if they start charging extra for every ticket that they sell (most customers will catch on and then avoid booking tickets with them).

In India, low cost airlines came up with a way to make more money. If a passenger booked a ticket and proceeded to travel on the airline, then well and good. However, if the consumer decided to cancel the ticket, then this would be a good way to make some more money. So do 2 things, either make the proceed of money refund so difficult that in some cases the passenger would give up and not claim the money back, or claim that the passenger cannot get a refund and the only way is to get a coupon that would entitle you to travel again on the airline. This can be a problem when you really don’t have plans of using the coupon, since they would expire in some time and that money is gone. I have faced both those issues when I booked travel via SpiceJet and Go. The trip got canceled, and it took around 4 months to get my money back from SpiceJet after some calls including some frustrating conversations where they asked for all sorts of information and twice claimed that their systems were down. With regard to Go, they gave me some coupon redeemable on another flight, and I could not use those (and I regret not forcing the issue by going to a consumer forum for help).
Now, the Government has decided that this will not do, and airlines have to refund money within 7 days:

NEW DELHI: Domestic airlines will no longer be able to hold passengers who cancel their tickets to ransom by delaying refunds indefinitely or by asking them to fly again instead within a given time. Acting on complaints, the government is set to issue new refund rules: airlines will have to issue refunds within a week and cannot swap refund for another flight.
Better still, the new rules make it mandatory for airlines to refund the entire amount of passenger service fee (Rs 225), congestion surcharge (Rs 150) and fuel surcharge (at present Rs 1,950 for short flights and Rs 2,350 for others) on ticket cancellation. Because these three alone add up to Rs 2,325 for flights below an hour’s duration and Rs 2,725 for others, many low-cost carriers have been advertising basic fares of Re 1, Rs 3, Rs 99 or even zero to give the impression that their fares are low and it is taxes and surcharge that have made flying expensive.

These rules are likely to be notified by the Directorate General of Civil Aviation and approved by the aviation ministry last week and DGCA is likely to notify these shortly. This is an excellent move by the Government that should help in regulating the whole issue of fraud in cancellation of tickets, and lead to benefit to consumers. Overall, a great move that airlines would not really like, but something that was long overdue.