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  1. #1
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    C J Karira
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    Low Cost Airlines....


    Recently I booked tickets on Air Deccan and Indigo for my mother.
    The tickets were booked on yatra.com and paid for by Credit Card.

    The cost of the ticket was shown as "Passenger Fare" and "Taxes". The taxes are approximately Rs. 1725.00 for each ticket.

    From experience, I know that these "Taxes" include Passenger Service Fee, Airport Tax, User Charges, Fuel Surcharge, Additional Fuel Surcharge, Security Charges, etc...."

    Due to health reasons, my mother could not make the trip.
    While cancelling the tickets, BOTH the airlines deducted the "passenger fare" part of the cost (which is correct, since the tickets were clearly non-refundable). However, BOTH the airlines told me that for the "taxes" part, they will only issue a voucher that can be used by the same passenger within 180 days and on the same airline.

    My thinking is that all these so called "taxes" become payable when a passenger actually travels. These "taxes" are collected by the airline, on behalf of the Government and to be paid to the Government when the passenger actually flies. They cannot collect taxes, not pay to the Government and moreover not refund to the passenger, but ask him to utilize this amount through a voucher which is non-transferable.

    Some research showed me that both Air Deccan and Indigo owe the Government huge amounts in taxes which they have not paid and also owe large amounts to the Airports Authority of India (AAI) for parking fees, navigation fees etc, which also they have not paid and are long overdue.

    I would like to know the following information through a RTI :

    1. When do these "taxes" actually become due ?
    That means , when are the airlines actually supposed to pay to the Government or the appropriate authority ? Are they supposed to pay the Government within a stipulated time period of collecting the amount OR only after a passenger flies ?
    2. Can someone collect taxes on behalf of the Government , not pay the Government and then also not pay back the passenger ?
    3. What are the relevant rules under which, someone who collects money on behalf of the Government and misuses the funds, can be penalised ?
    4. How much do these airlines (and others too) owe the Govt. on "taxes" and AAI on other charges ?
    Since how long are these payments overdue ?
    What action has the Govt. or AAI taken against these airlines ?
    If no action, why not ?
    When will action be taken ?

    Whom should I address my RTI application to ?

    Ministry Of Finance, Ministry of Civil Aviation, DGCA or AAI ?

    Can members please guide me.

    I was told that these procedures are in place by most airlines since mid October. Members and guests should bear this aspect in mind before booking tickets and check with the airline before paying for a ticket.


    › Find content similar to: Low Cost Airlines....


    Last edited by karira; 28-11-07 at 02:09 PM.

  2. #2
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    Re: Low Cost Airlines....


    Hi Karira,

    Ministry of Civil Aviation is an umbrella for DGCA or AAI. So, as per my opinion you should address your application to Ministry of Civil Aviation.
    Ministry Of Finance does not seems to be in role here.

    All the best.
    Regards.
    Sunil Kumar
    Gurgaon (Haryana)
    -------------------------------
    "Run towards you target. If you can not run, walk. If you can not walk, crawl. The important is 'keep moving'."

  3. #3
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    Re: Low Cost Airlines....


    Airlines fleece travellers on refunds

    NEW DELHI: Ever tried cancelling an air ticket? At best, you will get Rs 225 cash back, irrespective of the ticket price, if you happen to miss your flight. And if you decide to cancel your ticket, even days in advance, you’ll get back nothing! Air passengers across India are being taken for a ride by airlines on refund policies.

    Passengers booked on full-service carriers don’t get back any cash if they cancel a ticket, even days ahead of their scheduled departure. “I had booked a ticket with SpiceJet, which I cancelled well in advance (five days). Apart from forfeiting the entire fare, the airline deducted the full travel insurance charge. Majority of the surcharge and taxes were also gobbled up,” said a partner in a Mumbai-based chartered accountancy firm B Maheshwari.

    Airlines deduct Rs 500-750 from the ticket amount (which includes ‘taxes and surcharges’ of Rs 1,725) while the balance amount is credited to a non-refundable account. A passenger can use this non-refundable amount to travel by the same airline within 12 months.

    But if the passenger decides not to travel by that airline, the full amount is forfeited! In case one decides to postpone travel, one will have to bear the cost of the air ticket to that destination on that day. If the fare is higher, the passenger will have to shell out more money and if it’s lower, most carriers don’t refund the balance. Did someone say policy of convenience? Now, let’s consider a ‘no-show’ on an airline.

    "If a passenger happens to miss his/her flight, only the passenger service fee of Rs 225 is refunded," explained an official of a low-cost carrier. He also pointed out that while all low-cost carriers deduct Rs 750, Simplifly Deccan deducts Rs 500 in case of cancellation.

    The Travel Agents Federation of India (TAFI) is also up in arms against the classification of surcharges under taxes, which are forfeited by airlines. The only reason for such a classification is to deprive travel agents of their legitimate commission, say travel agents, who get a commission on the fare but not on the surcharge.

    “First of all, fuel surcharge and congestion charge (which amount to about Rs 1,800) should not be included in taxes. And in case they are, airlines should refund the whole tax amount to the customer in case of a cancellation or no-show,” says TAFI general secretary Ajay Prakash.

    From Monday, airlines will increase the fuel surcharge by Rs 300 and travel agents across India are set to protest against this. “We are contemplating issuing an ultimatum to airlines that henceforth travel agents will not collect any additional surcharge on their behalf. They will need to make arrangements to collect the same from passengers directly,” Mr Prakash said.

    SpiceJet VP-marketing and planning Kamal Hingorani says, “Fuel surcharge is not refunded in case of cancellation because if a passenger cancels the ticket at the last moment, there is an opportunity cost that the airline has to incur. For instance, the ticket could have been sold at a higher price. Selling it at a short notice is difficult.”
    According to airline policy, “Cancellation/changes within two hours of departure or failure to check-in at least 30 minutes before scheduled departure will result in the fare being forfeited.”

    Air Passenger Association of India (APAI) president Sudhakar Reddy is also unhappy with airlines. “With fuel surcharge increasing by Rs 300, amounting to Rs 1,625, this is even more misleading on the part of airlines.” Taking notice of the discriminatory refund policies of airlines, the Monopolies and Restrictive Trade Practices Commission (MRTPC), in May this year, had issued notices to six carriers—Indian, GoAir, Air Sahara, Air Deccan, SpiceJet and Alliance Air—terming their refund policies as unfair.

    Union minister for civil aviation Praful Patel has also taken notice of the refund policies of airlines. “We will not only penalise them but also make them refund the money collected on account of tax,” he said on the issue of “cartelisation by airline companies” during question hour in Lok Sabha on Thursday.

    On the other hand, the European Union on Friday issued new guidelines under which airlines must include all taxes and charges in the headline price first shown to consumers. Clearly, the Indian government also needs to take a strong view on discriminatory refund policies, which are hurting consumer interests.

    <!--google_ad_region_end=article-->
    Airlines fleece travellers on refunds- Airlines / Aviation-Transportation-News By Industry-News-The Economic Times

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  4. #4
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    Re: Low Cost Airlines....



    Kingfisher, Jet get notice from DGCA on no info


    New Delhi, Dec. 21: The director-general of civil aviation (DGCA) on Thursday issued a showcause notice to Jet Airways and Kingfisher Airlines asking them why action should not be initiated against them for not furnishing the details of the charged tax components in their domestic airline tickets.

    The DGCA said that under paragraph 15 of Schedule XI to the Aircraft Rules, 1937, it was in violation of the conditions for operations annexed to the permit to operate Scheduled Air Transport Services.
    It may be recalled that the government had on December 4, 2007 asked all airlines to clarify as to what charged tax components in their tickets were.

    They had also been asked to provide confirmation whether all the taxes shown by them in their tickets/website had been deposited with the government.

    The airlines had been asked to submit the record of the taxes thus deposited.

    In a letter dated December 4, 2007, the DGCA had said that perusal of the fare shown on the airlines website had revealed that the airfares had two components — the basic fare and the taxes. However, it was not clarified as to whether components like passenger service fee and fuel surcharge were included in the basic fare or had been clubbed under the heading of "taxes".

    The letter stated that a "tax" was defined to be a fee levied by the government on a product, income or activity and such amounts were to be deposited with the government and a record was required to be maintained for the same. In view of the ambiguity in the airfares, the DGCA had sought a clarification from the airlines.

    In a letter dated December 11, a reminder had been sent by the DGCA to all airlines advising them to furnish their reply latest by Wednesday, failing which it would be assumed that the airlines had nothing to say in the matter, and action as deemed fit, would be taken under the Aircraft Rules, 1937.

    Since the airlines had not replied to the DGCA on Thursday, a showcause notice was issued to the airlines.

    The replies of the airlines have to reach the office of the DGCA by January 4, 2008, failing which action as deemed fit would be taken against them.

    The Asian Age - Enjoy the difference

  5. #5
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    Govt to make airlines play fair on fare refund


    As reported by Saurabh Sinha of TNN in The Times of India, Hyderabad Edition, on 22 May 2008:
    Welcome

    Govt to make airlines play fair on fare refund


    New Delhi: Domestic airlines will no longer be able to hold passengers who cancel their tickets to ransom by delaying refunds indefinitely or by asking them to fly again instead within a given time. Acting on complaints, the government is set to issue new refund rules airlines will have to issue refunds within a week and cannot swap refund for another flight.

    Better still, the new rules make it mandatory for airlines to refund the entire amount of passenger service fee (Rs 225), congestion surcharge (Rs 150) and fuel surcharge (currently Rs 1,950 for short flights and Rs 2,350 for others) on cancellation of tickets.

    Since these three alone add up to Rs 2,325 for flights below an hours duration and Rs 2,725 for others, many low cost carriers have been advertising basic fares of Re 1, 3, 99 or even zero to give the impression that their fares are low and it is taxes and surcharge that have made flying expensive. Once the new refund rules come into play, these carriers may be forced to come clean on their pricing strategy.

    The proposed rules are part of the new civil aviation requirement (CAR) framed by the Directorate General of Civil Aviation (DGCA) and approved by the aviation ministry last week. The DGCA is likely to notify these for implementation shortly.

    The CAR severely indicts airlines, saying that though the government does not usually interfere in their commercial practices, the volume of complaints necessitates some affirmative action to safeguard the interests of the travelling public.

    Under these new benchmarks, airlines will have to make refunds for payments made by credit card within seven days of the cancellation. Many airlines, especially low cost ones, do not issue refunds for cancelled tickets.
    They deduct a cancellation charge and retain the balance which can be adjusted by the passenger for flying with the airline again within a certain time. The government consulted refund rules of several countries before coming out with its own stringent draft of rules.

    PLANE-SPEAK


    In case of credit card payments, airlines will have to make refund within 7 days of cancellation In case of cash transactions, refund to be made immediately at point of sale Airlines will refund service fee, fuel and congestion surcharge Passengers will have to be given option of refund.

  6. #6
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    Re: Low Cost Airlines....


    As reported by TNN in The Times of India, Hyderabad Edition on 23 May 2008:
    Welcome

    ONE-WAY TICKET


    New rules for flight ticket refunds


    New Delhi: In a major relief to frequent fliers, domestic airline companies can no longer insist that passengers, who cancel their tickets, fly with them in the future instead of giving them a refund.

    The Directorate General of Civil Aviation (DGCA) on Thursday issued new rules for ticket refunds, which will be followed with immediate effect. TOI had carried a report on the move on Thursday.

    Airline companies have already gone into a huddle to meet the new requirements, which include refund of payments made by credit cards within a week. Cash refunds will be made at point of sale without any delay. Carriers that, so far, gave passengers the option of flying with them instead of refunding their money, will now have to work out a system to refund the ticket fare. While the new rules are consumer-friendly, the aviation ministry also hopes to get rid of the term ‘surcharges’ in airline pricing policies. DGCA has made it mandatory to refund all taxes and surcharge “unless these are clubbed with basic fares”. Now carriers, especially low-cost ones, may have to charge higher basic fares to have the leverage of making some deductions by removing some surcharge. “Air travel is increasingly getting expensive. We can’t retain the same level of taxes and surcharge and also levy a higher basic fare, as that will lead to very high overall cost. Most probably, basic fare will have to be increased regularly as till now we just hike the fuel surcharge every month with each increase in jet fuel price,” said an airline official.

    With crude prices touching $134 a barrel, airlines fear another steep hike in jet fuel price this month-end. Now, instead of routinely increasing fuel surcharge, they may have to go in for higher basic fares that includes all or most cost components.

    The DGCA rules on refunds are attached to this post.
    The notification is "effective forthwith"
    Attached Images Attached Images
    Last edited by karira; 23-05-08 at 11:27 PM.

  7. #7
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    Re: Low Cost Airlines....


    address your RTI to DGCA. They are the ones deciding fares and refund rules.

  8. #8
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    Re: Low Cost Airlines....


    Quote Originally Posted by dotpolka View Post
    address your RTI to DGCA. They are the ones deciding fares and refund rules.
    This is an old thread and karira has found out the answers long back. I am cosing it down.
    Defeat is not final when you fall down. It is final when you refuse to get up.

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