India’s top court on Friday ordered airlines to refund passengers who were forced to cancel tickets booked during a two-month, nationwide lockdown to stop the spread of the novel coronavirus.
The Supreme Court told airlines to refund the money within three weeks in a decision that will add to the burden on cash-strapped Indian carriers whose revenues have been hit by coronavirus restrictions on air travel.
The lockdown, imposed on March 25, banned domestic and international travel, closed factories, schools, offices and all shops other than those supplying essential services.
It caused extensive economic disruption and measures were eased from May as the virus was still spreading.
Indian airlines, including Vistara, a joint venture between Tata Sons and Singapore Airlines, IndiGo and SpiceJet Ltd, have sought interest-free credit of at least $1.5 billion from the government to enable them to cope with the loss of revenue from the pandemic.
A three-judge bench of the court said for cancellation of bookings for travel after the lockdown period, airlines must give refunds within 15 days of the order or, if the carriers are in financial distress, provide a credit that can be redeemed until March 31, 2021.
The credit shall be transferable and for use on any sector covered by the airline. To encourage customers to use the credit, airlines must pay nominal interest each month on the amount until March 31, 2021.
If the amount is still unused, carriers must offer a refund, the court said in its 35-page order.
The ruling comes in response to petitions filed by various individuals and organisations including Air Passengers Association of India and Travel Agents Federation of India that alleged violation of refund rules by airlines.