Govt asks airlines to reduce cancellation, rescheduling charges

To put in place ombudsmen at Delhi, Mumbai airports, make it easier for leasing companies to operate in India

The ministry of civil aviation today asked domestic airlines to reduce charges related to cancellation and change of travel date by implementing a graded system for levying such fees.

Last week, domestic carriers increased cancellation charges to Rs 1500 from Rs 1000. Civil Aviation Secretary K N Shrivastava said, “We asked them (airlines) to moderate it....Reduce it and have a graded system. The airlines have agreed to consider it and said they will come up with a formula soon." A graded system would mean lower charges for cancellation and change of travel date well ahead of the original date for which the ticket was booked.

Further to address passenger grievances related to air services, the ministry today decided to have ombudsmen at Delhi and Mumbai airports. Shrivastava informed, “Time has come to implement the ombudsman system. We will have ombudsman set up in Delhi and Mumbai to begin with. Then, depending on experience, we will have them in major centres."

The decisions were taken at a meeting attended among others by top ministry and DGCA officials, besides IndiGo CEO Aditya Ghosh, Air India Director Nasir Ali and senior officers of Jet Airways and SpiceJet.

The Civil Aviation Ministry also decided to amend Aircraft Act and Rules to safeguard the interests of aircraft leasing companies. Aircraft leasing companies have increased lease rentals and are specifying stringent conditions for Indian airlines in view of the difficulties faced by lessors in re-possessing aircraft from the now grounded Kingfisher Airlines (KFA).

Shrivastava said global leasing companies are “wary” of doing business in India. "To ensure government's commitment to abide by the Cape Town Convention, we have decided to incorporate changes in Aircraft Act and Rules (1934) to satisfy the lessors," he said. Cape Town Convention is a global treaty to standardise transactions involving movable property like aircraft and their engines, railway equipment and space assets.

Airports Authority of India (AAI) had taken over several aircraft, including leased ones, to recover dues from Kingfisher Airlines. Banks and other lenders also contemplated similar moves and there were several court cases, with the leasing firms (which actually owned these planes) not able to get them back.

At the meeting, the government also suggested that domestic carriers should increase air service operations particularly to those states which have slashed taxes on jet fuel. The recommendation had been made at a meeting earlier this week in which the state governments wanted airlines to enhance operations in lieu of their considering reducing value added tax on aviation turbine fuel (ATF). The airlines have agreed to consider the proposal.

To begin with airlines have agreed to launch more operations from non-metro airports like Bagdogra- Kolkata, Agartala-Kolkata, Coimbatore-Mumbai and Coimbatore- Delhi. Some of these services would be launched in the next 30-60 days or during the coming Winter Schedule.

With an eye on notifying shortly a policy to enhance regional air connectivity policy, the ministry asked airlines to augment their fleet of smaller aircraft and to determine airports they wished to fly to. “We asked the airlines to start their homework on how to go ahead. The steps would include acquiring small aircraft and deciding on the preferred destinations (Tier-II and III destinations). They expressed keenness in this regard”, informed Shrivastava.

As regards air connectivity to remote places such as Andaman & Nicobar Islands, Lakshadweep and Leh, the ministry has suggested that domestic airlines put in place differential fare structure for local residents and tourists. The ministry suggested that the airlines could consider charging special fares for the local residents and dynamic fares for tourists. "Distinction needs to be made between tourists and locals who want to travel to the mainland for routine work," he said.