Supreme Court Orders Airlines To Pay 0.75% Interest On Refund Of Cancelled Tickets In These Cases

The Supreme Court has now announced that airlines will have to refund the ticket amount to the customers whose flights were cancelled in the lockdown that was imposed due to the COVID-19 pandemic.

However, the Supreme Court has given the airlines the option of giving the customers a credit shell instead of refunding the money.

Read on for all the details!

Supreme Court Orders Airlines To Fully Refund Tickets Of Flights Canceled In Lockdown

The formulation framed by the civil aviation regulator, the Directorate General of Civil Aviation (DGCA) has been approved by the Supreme Court. The DGCA asked that the amount of the tickets of flights that were cancelled during the lockdown be refunded to the passengers. 

Since March 23rd, all international flights were suspended, to prevent the spread of coronavirus. Neither was any scheduled international flight allowed to enter India, or leave India.

All the tickets booked up to May 24 will have to be refunded by all the airlines, as ruled by The bench of justices Ashok Bhushan, RS Reddy, and MR Shah.

A three-judge bench of the supreme court has also given the airlines the option of creating a credit shell in the name of the passengers who booked any tickets for any route before March 31, 2021. 

0.5% To 0.75% Interest Will Be Accumulated On The Money In Credit Shells

As per reports, this credit shell allotted to each customer will be transferable. Also, interest will be added to the money in the credit shell, which will be 0.5 percent from the date of cancellation till June 30. After that,  0.75 percent interest will be accumulated till March 31, 2021.

The judges have also ruled that if any tickets have been booked through travel agents, the refund will be done through travel agents.

Previously, the DGCA had issued a notification that ordered airlines to refund the entire ticket amount to the customers who scheduled tickets during the lockdown, i.e.March 25 to April 14. 

This order still remains and hasn’t been discarded.

The government had initially said that transferable refund vouchers should be given to the passengers which was opposed by Vistara and AirAsia. The airlines said that most customers would prefer credit shells. IndiGo has already refunded the booking amount in full whereas GoAir has said that airlines are on the verge of shutting down if the situation doesn’t get better soon.