Airline Trauma

It is probably a bad time to be in the aviation business anywhere in the world. Rising fuel costs have battered the already fragile finances of the industry because higher fares have an impact on business. It is reported that even travel portals based on electronic airline bookings are looking for other businesses. In India, airlines are trying to figure out creative ways to generate...

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  • Airline Trauma
    It is probably a bad time to be in the aviation business anywhere in the world. Rising fuel costs have battered the already fragile finances of the industry because higher fares have an impact on business. It is reported that even travel portals based on electronic airline bookings are looking for other businesses. In India, airlines are trying to figure out creative ways to generate revenue without a big increase in basic fares. For instance, Jet Airways is planning to levy a charge on more than one checked-in bag. Globally, some budget airlines already charge for checked-in luggage.

    Meanwhile, there are a couple of positive blows on behalf of long-suffering airline customers. So far, airlines have got away by penalising passengers cruelly for cancellations and reschedulement while they themselves have no responsibility for frequent and last-minute cancellations when travel plans have been made many months in advance, precisely to avail of attractive low fare offers.

    The Directorate General of Civil Aviation (DGCA) issued new rules on refund of tickets at the end of May. These mandate that airlines will have to refund the entire passenger service fee of Rs225, congestion surcharge of Rs150 and fuel surcharge of Rs1,950 plus.

    The DGCA has also said that tickets booked by paying cash will have to be refunded immediately and those booked through credit cards will have to be refunded within seven days. This should ensure that passengers actually get a good chunk of their money back on cancellation of flights. But don’t start the celebrations yet; airline companies have got together to find ways to restructure the fares so that a larger amount is shown as basic fare and can be retained on cancellation. While that is bad news for fliers, it will at least cut the hypocrisy of airlines charging tiny fares (as low as one rupee sometimes) and loading big chunks of the cost as fuel surcharge, congestion surcharge or service charges.

    Meanwhile, the Delhi State Consumer Commission has also slammed airlines for cancelling flights on frivolous grounds and then forcing customers to run around for a refund. The Commission imposed a fine of Rs50,000 on Air Deccan and warned all other airlines as well. It was running a case filed by Ajay Goel of New Delhi, who had booked a promotional fare ticket, as much as six months in advance to avail of a Rs300 fare for a Mumbai-Delhi flight. A few days before the flight, the airline called to say it was cancelled. Goel alleged that the airline had cancelled only the budget flight but no regular fare flights were cancelled.

    The problem of cavalier treatment by airlines is apparently a global one. Customer satisfaction from airlines has hit a seven-year low in the US because of cancelled flights, lost baggage and worse – airlines going out of business – according to the latest University of Michigan American Customer Satisfaction Index.

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