Air travel remains unrivalled as the preferred mode of long-distance transportation globally, with 4.7bn (billion) passenger trips logged in 2023, according to the International Air Transport Association (IATA).
Its allure lies in speed, cost-efficiency, service and relative punctuality—an irresistible combination for the modern traveller. And yet, there is hardly any regular flyer who has escaped unscathed from the occasional chaos caused by long flight delays, cancellations, diversions, bad service or, worse, emergency landings that leave them stranded in a foreign land for days together.
EAS Sarma, 83, a former secretary to the Union government, suffered two harrowing experiences while travelling with his wife, 77, in recent months. He has raised some important broader issues in a letter to the civil aviation secretary dated 5th April. Here’s what happened to Mr Sarma.
In the first instance, IndiGo Airlines abruptly cancelled its Salem-Bengaluru flight without prior notice, forcing the couple to scramble to book an alternative flight with Alliance Air and Air India Express, incurring additional costs and uncertainty.
In a second incident, Alliance Air cancelled a Salem-Bengaluru flight after having issued boarding passes for it. The Sarmas had to hire a taxi at an exorbitant Rs11,800 to reach Bengaluru for a connecting flight to Visakhapatnam.
Their ordeal is all too familiar for passengers travelling beyond India’s six major metropolitan cities, where flight schedules are erratic and options limited. However, Mr Sarma makes a different point about flawed policy. He argues that the government’s push to “set up airports at multiple locations in the guise of providing connectivity” has resulted in ‘far too many airports’ served by very few airlines. This lack of competition, he contends, has birthed a “regressive cartel of private airline companies,” allowing them to exploit passengers with impunity.
In fact, the directorate general of civil aviation (DGCA) has a passenger charter, aligned with standards in many developed nations. It mandates graded compensation for delays, cancellations, downgrades and overbooking, alongside amenities like hotel stays or vouchers. The AirSewa platform (airsewa.gov.in) also offers grievance redressal; yet, transparency remains a gaping hole.
Neither DGCA nor the ministry of consumer affairs, which operates the national consumer helpline (NCH), publishes comprehensive data on refunds, compensation, or penalties imposed on airlines. Also, the compensation itself is not easily quantifiable, since it is in the form of alternative flights, flight vouchers, hotel stay, etc.
However, media reports, citing unclear sources, publish fragmented compensation numbers. A Moneycontrol article claimed that airlines paid Rs24.86 lakh for cancellations affecting 18,818 passengers in February 2025. It also noted that IndiGo paid a mere Rs18,000 in compensation from January 2022 to September 2024, despite 25,500 reported cancellations. A LocalCircles survey in April 2025 revealed that 61% of passengers affected by cancellations in the past year received no compensation. While airlines often cite ‘extraordinary circumstances’ to avoid liability, it is evident that compensation is disbursed, albeit inconsistently, and there is no clarity on who gets what.
But Mr Sarma makes a different point about the refund process. We know that payments for online flight booking are instantaneous and often include an anachronistic ‘convenience charge’ – refunds take anywhere between seven to 10 days, with no compensation for the ‘inconvenience’. Mr Sarma alleges that airlines strategically hold onto these funds, using them as “interest-free working capital at the cost of passengers.” He believes that an independent audit would reveal that the money runs into several thousand crore rupees annually. This practice mirrors a broader issue in India’s digital economy, where delayed refunds are common across sectors, often leaving consumers financially strained.
And yet, it is not all bad. India’s aviation sector, despite many challenges, is a global powerhouse. It ranks as the third-largest domestic market, growing rapidly, with IndiGo commanding a 60% market share and sustained profitability. The Tatas, with a 10%-12% market share, are navigating a complex transition, merging Vistara’s premium niche with a revamped Air India, although SpiceJet, holding a 5% share, grapples with financial woes and grounded fleets.
Data suggests that India is no better or worse than global airlines, when it comes to delays, cancellations and service delivery, barring a few notably excellent carriers, such as Singapore Airlines, Emirates and Qatar Airways.
TravelPerk’s 2024 data highlights India’s international flights as a bright spot, with a cancellation rate of just 1.1%—among the lowest of the top-10 countries with the highest flight volumes—compared to China’s 5% and Canada’s 3.4%. As for flight delays, about 37% of flights experience a minor or major delay which means that 63% are on-time. In terms of flight delays, India ranked 4th after the US, Italy and China.
Domestic travel, however, remains plagued by policy missteps. Aviation is a high-cost, low-margin business, vulnerable to risks like climate events, pandemics and geopolitical upheavals. High operational costs, particularly aviation turbine fuel (ATF) prices burdened by heavy taxation, erode profitability and then there is regulatory uncertainty. Historically, India has granted licences to industrialists enamoured by aviation’s glamour but lacking expertise or deep pockets, leading to financial mismanagement.
Consequently, the 1990s saw the collapse of Damania Airlines, ModiLuft and East-West Airlines, while the past decade witnessed the demise of Sahara Airlines, Kingfisher (with Deccan Airways) and Jet Airways. Air India and Indian Airlines, long mired in political interference, have returned to the Tata fold, a move spurred by the fallout from Jet Airways and Kingfisher’s closures which threatened India’s aviation growth story. Ironically, in this very period, when India had built world-class airports at several metro cities, it launched the ambitious UDAN (Ude Desh Ka Aam Nagrik) Scheme in 2016 promising regional connectivity and affordable flights to tier-2 and tier-3 cities. But where were the airlines to fly people there?
The consequence of grand plans, without adequate carriers, has led to the kind of harassment that Mr Sarma has documented. Passengers, depending on UDAN linking them to smaller cities, can only hope that the government revises its aviation policies to ensure that there are more airlines competing for growing passenger traffic at its 220 airports.
Indian aviation has high potential and contributes 5% to the nation’s GDP (gross domestic product). It is an industry that demands stable regulatory policies, reduced taxes on ATF and recognition of its thin margins and external vulnerabilities. Only then can competition flourish, refocusing the industry on service delivery and customer satisfaction. Until these systemic issues are addressed, the skies will remain a realm of convenience and chaos for India’s travellers with consumer satisfaction, service delivery and compensation taking a back-seat.
Comments
InvestMoney
4 weeks ago
This reminds me of my experience almost almost 15 years ago when i travelled from chennai to patna, via calcutta. Sahara issues both boarding cards at chennai, but the kolkotta -patna journey was cancelled. I took a train the next day. But my office was unable to collect any refund from Sahara or travel agent!
Recently my son and his friends came to banglore to attend interviews for Mtech at banglore. They booked their hotel stay near the college/station through a three lettered global hospitality company that promised AC accomodation for 4 days at low price. They found a clean, but run down room without AC. When they confronted the Hotel staff they were told that the Aggregator (?), posts the rooms as AC, although they have asked them to change it many times. The boys called the aggregator who agreed to making an error, but provided the refund in their account as un spent money/ tokens.
Shady businesses are cut from the same cloth.
Unfortunately, some of these locations are too small and competition is not going to be there and if there are 2 airlines going there, the business would become unviable. The point is that with low cost airlines, these risks are known and the buyer takes these known risks when they buy their tickets. Low cost airlines do not pay compensation. They will at best put you on their next flight if such an event occurs. I do not think any airlines cancels flights knowingly only to keep the money for 7-10 days. The reputation damage and deterioration of their on-time performance and other performance figures is far more than the interest they could save for 10 days. This can be different for airlines going into bankruptcy who might want to sell tickets at any cost and delay refunds simply because they are gasping for breath. There is definitely a need for regulation in that space to avoid businesses blatantly cheating customers. In early covid days in 2020, I bought an international ticket from AirAsia and realized this how they play this trick. There were no flights to the location I had to go. AirAsia started selling tickets at absolutely low prices claiming they are restarting daily flights. As there was no choice, I bought a ticket. 20 days later (10 days before the flight), they cancelled the flight and offered me a credit note. The process to ask for a refund instead was a nightmare, although I still pursued them. I tracked for several months and noticed the same pattern - same flight was launched again and again and tickets were sold and when enough tickets were sold, they kept cancelling the flight. That flight never took off for another year after that, but they sold tickets for the whole year and kept the cash. They used all the tricks they could to convert the refund into a credit shell, but I beat them on all the tricks. After a crazy amount of follow up for 3 years and visits to their office where they threatened me to get me jailed (for asking a refund!), they told me they have put me on priority for a refund but it will take 3-4 months. It took them another 1 year after that to finally refund me in 2024 with zero interest. I wonder how many more non-priority customers of theirs are still waiting for their refunds or have stopped pursuing. With international flights, there is zero recourse - you reside in country A, the airline is registered in country B and you were likely travelling to country C. Where would you go to seek legal remedy for a 200 dollar ticket... most people forget and move on.
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Recently my son and his friends came to banglore to attend interviews for Mtech at banglore. They booked their hotel stay near the college/station through a three lettered global hospitality company that promised AC accomodation for 4 days at low price. They found a clean, but run down room without AC. When they confronted the Hotel staff they were told that the Aggregator (?), posts the rooms as AC, although they have asked them to change it many times. The boys called the aggregator who agreed to making an error, but provided the refund in their account as un spent money/ tokens.
Shady businesses are cut from the same cloth.