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 scenario is one of the biggest fears that people have when dealing with credit cards, and handing this information off to other parties. You hand this off to a person purporting to come from a bank, and then find that charges are being piled on your credit card, and then have to run around in trying to clear yourself of these extra charges. It can get real frustrating and annoying for people to have to deal with such kind of problems. The normal tendency is to blame the bank for keeping such people on their rolls, for having such a process where misuse can happen, and for then being insensitive to the problems they are facing. Read more about the incident:

The manager of a Delhi-based private firm was arrested along with two accomplices on Friday on charges of allegedly making purchases using the credit card of an ICICI bank customer.
“We registered a case on the complaint of Atri and arrested Goyal from the Rohini branch of ICICI Bank. The other two were arrested at the instance of Goyal. During interrogation it was revealed that Goyal is the manager of i-process, an outsourcing private company of ICICI Bank, dealing with credit card users whereas accused Ashish Katyan and Dev Aggarwal were working as recovery agents in another collection agency,” said DCP (outer) Atul Katiyar. “The accused used to contact the customers and introduce themselves using a fake name. Then they used to send Ashish Katyan for collecting the card from consumers. Instead of blocking the cards, the three used to go shopping.

The basis for the information that these thieves come up with is information that the bank has revealed to them, so the bank should be the one to blame for this. In the process of reducing their costs by outsourcing this service, they have let such a thing happen, and hence need to be penalized. If this was a country with stronger implementation of privacy and data theft laws, the bank would be in serious trouble.

Till some time back, the various Government run PSU’s and other departments always felt that they were not providing a service that could be challenged in court; that options such as consumer laws were only possible to be implemented if people had taken a service from a private company. It was only when they started getting castigated and losing cases in consumer forums and courts did the Government undertakings realize that they were also subject to the same laws and conditions as anybody else. And of course, as the economy opened up, and there was increased competition, this competition also drove the Government run departments to either shape up or lose out. The Railways has opened up somewhat and improved, but still there needs to be more improvement, as can be seen from this case:

AHMEDABAD: A consumer court has asked the Western Railway to pay Rs 6000 to a commuter for issuing journey ticket for wrong date and not cancelling the same. The court held that verification of details in ticket is primarily the railway staffers’ responsibility.
After hearing both the sides, member of the Forum, Jyotiben Jani concluded that it was the deficiency of service on part of railway authority, because despite mention of one date in requisition form, the booking clerk issued ticket of altogether different date. Hence, the Western Railway has been asked to pay Rs 400 as refund to ticket, besides Rs 600 for conveyance charges and Rs 5000 towards compensation for causing mental harassment to Malviya.

Overall this a good sign. Imagine the problem that would have been caused had the ticket not be cancelled, and been attempted to be used on the actual date of the journey. This would have revealed that the ticket was for a different date, and the person would have been left in a lurch, unable to make the journey.

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.

In the Indian air travel market, there are a number of low cost carriers (also known as discount airlines) that charge very low fares (or rather, they announce low fares, and then charge extra for fuel surcharge and taxes). If you have booked a ticket, and go through with you flight on the low fare, then you feel happy. However, from time to time, one gets to hear of people who had a bad time or who went through an experience that is not exactly consumer friendly; airlines consider this par for the course since they claim that the fare is low and one should not expect the same experience as one gets in full fare. However, one can expect that food and other such comforts may not be available in discount airlines, but basic consumer handling should be proper. In this case, a customer was told that his ticket had been canceled, and he had to pay extra for a regular ticket. As a result, he filed a complaint in the the consumer forum and got compensation:

NEW DELHI: The state consumer commission has pulled up private airline, Air Deccan, for cancelling the tickets of a passenger, booked six months in advance in a promotional fare scheme, just six days ahead of the departure date. The airline has been fined Rs 50,000 of which Rs 25,000 has been given as compensation to the consumer while the rest has been deposited in the state welfare consumer fund.
The airline had told the passenger that the flights on the Mumbai-Delhi route were not operational between May 1 and May 31, 2007 but contrary to claims, the passenger found out that the flights were not cancelled. As a result, he along with two of his relatives had to fly on a more costly flight that cost him an additional Rs 7,650.

From time to time, we find that airlines have been found to indulge in such customer unfriendly practices, and yet there is a feeling that they don’t care that this experience earns them bad remarks and reviews. Low cost carriers are supposed to do away with frills, but not basic customer experience, else they will keep on earning bad press like this.