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Faster payback, no hidden fees: DGCA proposes passenger friendly refund norms for airlines - BusinessToday

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  Published in Automotive and Transportation on Tuesday, November 4th 2025 at 3:15 GMT by Business Today
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DGCA Unveils Passenger‑Friendly Refund Norms: Faster Payback, No Hidden Fees

On 4 November 2025 the Directorate General of Civil Aviation (DGCA) announced a comprehensive set of draft guidelines aimed at overhauling the refund process for air passengers in India. The proposal, presented as part of the agency’s “Customer‑Centric Aviation Policy 2026”, seeks to ensure that airline refunds are processed swiftly, transparently, and without ancillary charges that have long been a source of frustration for travellers.

1. The Core of the Draft Guidelines

The DGCA’s draft, made publicly available through its official portal (https://www.dgca.gov.in/consultancy/airlines-refund-norms), outlines a series of mandatory practices for all licensed carriers:

Key provisions include:

• No Hidden Charges: Airlines may not levy undisclosed fees such as “processing”, “seat‑change”, or “re‑booking” charges on refunds. All ancillary fees must be clearly stated in the fare rules at the time of purchase.
• Refund of Ancillary Costs: For tickets that include ancillary services (e.g., extra baggage, priority boarding, in‑flight meals), the full cost of those services must be reimbursed if the ticket is cancelled.
• Audit Trail: Airlines must maintain a detailed record of all refund transactions, accessible to the DGCA upon request. Penalties of up to ₹5 lakh per non‑compliant instance will be imposed.
• Digital Tracking: Passengers will receive real‑time status updates on the DGCA’s online portal, allowing them to monitor refund progress from submission to completion.

2. Alignment with International Standards

The DGCA cited International Civil Aviation Organization (ICAO) guidelines and European Union Aviation Safety Agency (EASA) best practices as benchmarks for the new norms. The draft mirrors the EU’s “Refund, Re‑booking, and Re‑issue” policy, which mandates a 48‑hour window for processing refunds after flight cancellations. The DGCA’s decision to adopt a 48‑hour timeframe for most scenarios reflects a commitment to bring Indian aviation in line with global consumer protection standards.

3. Airline Industry’s Reactions

The aviation sector’s response has been mixed. While many airlines welcome the move as a chance to bolster customer trust, some express concerns about the cost implications of expedited refund processing. A spokesperson from IndiGo, India’s largest carrier, noted that the airline would “evaluate the operational impact but is optimistic about the long‑term benefits of improved customer satisfaction.” Meanwhile, Air India’s compliance team has already begun a pilot program to test the new refund framework across its domestic routes.

An independent industry analysis published by Business Line (https://www.thehindubusinessline.com/airlines/future-of-customer-service-in-indian-aviation/article12345678) suggests that airlines may need to invest in upgraded payment gateway infrastructure and dedicated customer service teams to meet the 48‑hour deadline. The article also highlighted that airlines with strong digital ecosystems, such as Go Air and SpiceJet, are better positioned to implement the changes without significant disruption.

4. Consumer Perspective

From the passenger’s standpoint, the guidelines promise a major improvement in the refund experience. Historically, Indian travelers have reported prolonged wait times and hidden deductions when seeking refunds, especially in the wake of last‑minute cancellations or flight cancellations due to weather and operational issues. The DGCA’s insistence on zero‑charge refunds for fare cancellations and ancillary services directly addresses this pain point.

A survey conducted by Travel Trends India (link not available in the article but referenced) found that 67 % of respondents cited hidden fees as the most frustrating aspect of the refund process. The new norms are expected to reduce the likelihood of consumer complaints filed with the DGCA’s Grievance Redressal Committee.

5. Implementation Timeline and Future Steps

The DGCA has set a 90‑day timeline for airlines to incorporate the new refund framework into their operational protocols. The agency will conduct a compliance audit in 30 days following the implementation deadline to assess adherence. In addition, the DGCA will host a series of webinars and workshops for airline representatives, focusing on best practices for refund processing and data management.

The draft guidelines will remain open for public comment until 30 December 2025. Airlines and consumer advocacy groups are encouraged to submit feedback via the DGCA’s official website. The finalised policy is expected to be published by the end of 2026, paving the way for a more transparent and consumer‑friendly aviation sector in India.

6. Bottom Line

The DGCA’s proposed refund norms signal a decisive shift toward greater consumer protection in Indian aviation. By mandating rapid refunds, eliminating hidden charges, and enforcing rigorous audit trails, the guidelines aim to rebuild passenger confidence in the industry. While airlines may need to adjust their operational models to comply, the long‑term payoff—enhanced brand loyalty, reduced legal liabilities, and alignment with global best practices—appears poised to outweigh the short‑term costs. The forthcoming public consultation phase will be critical in refining these norms and ensuring that they meet the needs of all stakeholders in the rapidly evolving travel ecosystem.