The Directorate General of Civil Aviation (DGCA) released new draft rules as part of its citizens’ charter on Tuesday that seems to indicate that PM Narendra Modi is serious about helping people wearing “hawaai chappals (bathroom slippers) fly in hawaai jahaaz (aeroplanes).” As an unintended consequence, railway passengers may have been reduced to second class travellers as many of them would have to pay cancellation fee more than that charged by airlines if the new rules are approved.
Among other things, the draft charter suggests radical intervention in regulating cancellation charges of domestic air tickets which for long have been termed as exorbitant and irrational by air passengers. It proposes that airlines cannot levy any cancellation charge on a passenger if the ticket is cancelled within 24 hours of booking it. This 24-hour lock-in policy would allow passengers to either cancel or make changes to their ticket without paying any money to the airline. However, this 24-hour lock-in policy would be available only to those travellers who have booked tickets at least four days (or 96 hours) from their date of travel. So for instance if a person books a ticket at 9 a.m. on Monday to travel on a flight before 9 a.m. on Friday, he can cancel or modify his ticket before 9 a.m. on Tuesday and get back the entire booking amount.
This effectively means that railway passengers, most of whom are economically worse off than air travellers, will now have to pay higher cancellation fee than air travellers.
A passenger travelling in the lowest class of travel in an unreserved compartment has to pay Rs 30 as cancellation fee if he decides to cancel his ticket. Those traveling in second class with an unreserved or a waitlisted ticket have to pay Rs 60 as cancellation charge. For passengers traveling with a confirmed ticket, the cancellation charges are even higher. These charges were doubled by the Modi administration in 2015. For cancelling a confirmed ticket upto two days before travel, the Indian railways charges Rs 120, Rs 180, Rs 200 and Rs 240 for second class sleeper, third AC, second AC and first AC respectively. Even cancelling a confirmed ticket for a non-sleeper second class compartment costs a railway passenger Rs 60. For tickets that are cancelled between two days to 12 hours of the train’s departure, 25 per cent of the ticket cost is recovered. For tickets cancelled within 12 hours of a travel, the passenger has to forfeit half his ticket price. The railways do not refund any money to passengers who cancel their ticket less than four hours from a train’s departure.
With the Modi government doubling cancellation charges, the railways has been striking it rich every time a passenger cancels. Information obtained through Right to Information (RTI) by an activist Chandrashekhar Gaud shows that the railway collected almost Rs 35 billion in cancellation charges from passengers in from 2014-15 to 2016-17. It collected Rs 14 billion in cancellation charges in 2016-17 alone. The amount of money earned by the railways from ticket cancellations is three per cent of its passenger revenue. It is unclear how much revenue different airlines earn each year on cancellation of tickets by passengers.
So how did things come to such a pass in a country where millions of poor and middle class people depend on the Indian railways to get to their hometowns, their loved ones and other destinations in times of tragedy or on occasions of joy? One of the main reasons for the government’s move to intervene was the exorbitant cancellation charges that were being imposed by airlines on passengers. Take the case of Indigo Airlines, the largest in terms of market share and most profitable of the lot in India. Indigo does not refund any money to its passengers in the event of cancellation of a ticket priced less than Rs 3,000. On most routes which Indigo flies where fares are in excess of Rs 3,000, passengers get only the difference in the airfare and the minimum cancellation charge as refund. So if a passenger flying from Delhi to Mumbai paying Rs 5,000 for a ticket decides to cancel his ticket, he gets back Rs 2,000. There have been instances of passengers complaining about getting literally nothing after deduction of various charges. India’s national airline Air India has similar rules. An Air India traveller will get no refund if he/she cancels the ticket within 24 hours of departure. For cancellations a week before departure, Air India passengers had to forfeit a minimum amount of Rs 2,220 as cancellation charge.
In many ways, the new draft rules by the Ministry of Civil Aviation are similar to ones followed in the US which is the world’s largest aviation market. American Airlines, the largest US airline, do not impose punitive charges on passengers cancelling their tickets within 24 hours of booking them. The ticket has to be booked at least two days before the departure date for being eligible for this reprieve. The Indian draft rules allow less elbow room for travellers with a longer planning period to avoid cancellation charges.
More than eight billion passengers used the Indian railways in 2016-17 travelling in different classes. Meanwhile, 104 million people travelled domestically on airlines in India in the same year. The number of railway passengers has increased only 6 per cent since 2010-11. The number of air passengers has more than doubled during the same period. No wonder the Modi government has put its mouth where the money is. The question is, whether the Modi government will treat the hawaai chappal class of railway passenger as compassionately as air travellers by reducing the burden of cancellation charges on railway tickets?