Govt puts hiking compensation for delayed, cancelled flights on back burner

Civil Aviation Secretary Rajiv Nayan Choubey indicated the passenger charter might drop all clauses that have been opposed by airlines

A proposed change of rules that would have made airlines liable to pay more compensation in the case of delayed and cancelled flights as well as for missed connecting flights has been put on the back burner under pressure from airline companies.

“Airlines have opposed the proposed rules. It will take some time before they are finalised,” said a senior aviation ministry official. 

The draft rules on the passenger charter were made public on May 22. Then the government had said after a public consultation of 30 days, the final rules would be notified by July 15. 

“Even when they are finalised, they are unlikely to retain the clauses that increase the financial penalty for airlines for delay and cancellation,” the official added.

The Federation of Indian Airlines, the lobby group, has argued any additional commercial burden due to increased compensation will create stress for the finances of the airlines, which are reeling from the twin costs of high fuel price and a fluctuating exchange rate.

The finances of airlines have been under severe stress also due to their inability to increase fares, despite a sharp increase in the cost of operations.

“In a recent meeting, the airlines have said that no intervention has come from the government in terms of policy to reduce the cost of doing business. In such times, any additional input cost will be detrimental to the sector,” said an airline executive present in the meeting.

The airlines, it has been learnt, have opposed the rules that make it compulsory for them to pay compensation to passengers in case a flight is delayed by more than four hours. The Directorate General of Civil Aviation had proposed the compensation amount equivalent to the ticket price.

Airlines, while suggesting the threshold of delay be increased to six hours in matters of compensation, have said instead of a full refund of the fare, they should be allowed to make alternative arrangements.

The rules also proposed to make airlines liable to pay compensation if a passenger missed a connecting flight.

“Airlines have said that any form of monetary penalty for a connecting flight will make it unviable to offer connecting flights, the fares of which are often cheaper. A particular airline should be made liable if the passenger misses a connecting flight on the same PNR, not anything else,” said an executive of a low-cost airline.

Another executive of a private airline said: “The government is promoting low airfares as a success story, but this will not be sustainable if the cost of operations goes high owing to reasons not under the control of airlines.” 

The expenditure of Indian airlines is higher than that of global peers due to taxation and high airport charges, he added.

Civil Aviation Secretary Rajiv Nayan Choubey indicated the charter might drop all the clauses that have been opposed by the airlines. Instead, emphasis will be laid on increasing compliance with the existing rules.

“The charter is intended to make passengers more aware about their rights. Collating passenger rights that are at different places into one document will not necessarily result in increased cost for airlines. However, we will take into account the condition airlines are in, owing to increased fuel cost, and take a view on this,” he said.

Flyers do not agree with this. Sudhakara Reddy, president of the Air Passengers Association of India, contested this, saying the high cost of operations could not be a reason for relaxing norms. “European or American regulators did not wait for a suitable time before implementing the laws. If the government waters down the draft proposal under pressure from airlines, it would be a mockery of the whole process.”