Union Minister for Consumer Affairs Pralhad Joshi on Saturday said he has ordered a probe into the exorbitant cancellation fees charged by online flight ticket booking platforms. Joshi said charging fees beyond what is disclosed at the time of booking undermines transparency and consumer confidence.
“I have directed the Department of Consumer Affairs and the CCPA to investigate whether online ticketing platforms are charging consumers excessive cancellation fees, beyond what airlines charge or are disclosed at the time of booking. I have directed them to check other online ticketing platforms as well,” Joshi wrote on X.
He added that if such practices are found to be unfair or violate consumer rights, they may amount to unfair trade practices under the Consumer Protection Act 2019. “The CCPA will take necessary action, including class action measures where appropriate, to protect consumer interests and ensure fair treatment of consumers.”
The Union Minister’s announcement came after Bharatiya Janata Yuva Morcha (BJYM) national secretary Tajinder Bagga wrote on X that he had mistakenly booked a flight to Navi Mumbai instead of Mumbai. When he tried to cancel through the online booking portal, Agoda, it showed a cancellation fee of Rs $4764 and refund only $1,571. However, Akasa Air’s website showed that the cancellation fee is only $1 $299 and refund amount $6,076.
Airline ticket prices increased after the Middle East war
The war in the Middle East has greatly affected the aviation sector with fuel prices continuing to rise due to the virtual closure of the Strait of Hormuz which transports the world’s energy supply by 20%. The Delhi government last week reduced value-added tax (VAT) on aviation turbine fuel (ATF) from 25% to 7% for six months, as it cited growing financial pressures on the aviation sector amid the recent global geopolitical developments, HT had reported earlier.
Chief Minister Rekha Gupta said the move aims to maintain Delhi’s economic competitiveness and support aviation, tourism and logistics activities in the capital.
“The concessional VAT rate on ATF will initially remain in effect for six months. The decision has been taken in the interest of both the nation and Delhi,” Gupta said, adding that the move could result in a revenue loss of nearly $985 Crores to Delhi Government.
According to officials, ATF accounts for nearly 40% of airlines’ operational costs, as airlines currently pay VAT and central excise duty on fuel purchases from oil companies. The government said higher tax rates have a direct impact on ticket prices and the financial health of airlines.
Gupta said the VAT on ATF contributes approx $1,368 crore annually, which is about 19% of Delhi’s total annual VAT collection. She added that the decision is in line with Prime Minister Narendra Modi’s focus on enhancing connectivity and economic activity.
