The Directorate General of Civil Aviation (DGCA) has proposed a series of sweeping reforms to India’s air travel ticketing and refund rules, aiming to make the experience more transparent and consumer-friendly. The draft proposal, released for public consultation until November 30, seeks to address persistent complaints about high cancellation fees, delayed refunds, and lack of clarity in airline refund policies. If implemented, the move could significantly alter how Indian passengers book, modify, or cancel their flight tickets — and could compel airlines to rethink their commercial practices to align with fairer consumer protection norms.

The DGCA said its proposed amendments to the Civil Aviation Requirements (CAR) concerning refund and cancellation rules are a direct response to the rising number of grievances from passengers over the past few years. Many of these complaints have involved airlines charging disproportionately high cancellation fees, failing to refund taxes or statutory charges, or delaying refunds for months. While the aviation regulator maintained that it does not intend to interfere in the commercial decisions of private carriers, it stated that “the volume and persistence of such complaints necessitate affirmative action to safeguard the interests of the travelling public.”

The Need for Change

In recent years, Indian flyers have increasingly expressed frustration with airlines’ rigid and often opaque refund systems. The issue gained heightened visibility during the COVID-19 pandemic when widespread flight cancellations left millions waiting for months to receive refunds. Although the DGCA and the Ministry of Civil Aviation intervened at the time, the experience exposed structural weaknesses in how refunds were handled. Even in the post-pandemic period, the DGCA continued to receive numerous complaints about excessive cancellation charges and incomplete refunds.

Against this backdrop, the DGCA’s latest draft proposals aim to ensure a more predictable and consumer-centric process that balances the rights of passengers with the operational realities of the airline industry. The proposals, if accepted, would apply to both domestic and international flights operated by Indian carriers, and to foreign airlines operating in and out of India to the extent that Indian passengers are affected.

The 48-Hour “Look-In” Option

The most notable feature of the proposed regulations is the introduction of a “look-in option” — a provision that allows passengers to cancel or modify their flight bookings without incurring any additional charges within 48 hours of the booking. During this period, passengers can either cancel their tickets altogether or make changes to their travel plans, such as modifying travel dates or times. The only exception would be the fare difference, if applicable, for the revised booking.

However, this facility will not be available for bookings made close to the departure date. For domestic flights, passengers will not be eligible for the 48-hour no-fee window if the flight is scheduled to depart within five days of booking. For international flights, the cut-off period is 15 days. According to the draft, “Beyond 48 hours of the initial booking time, this option is not available, and the passenger has to pay the relevant cancellation fees for amendments.” The DGCA has clarified that this option will apply primarily to tickets booked directly through the airline’s website, ensuring that passengers dealing directly with carriers enjoy the benefit of flexibility.

Streamlined Refund Rules

Another major focus of the proposed amendments is to bring consistency and accountability to how airlines process refunds. Under the new rules, airlines would have to adhere to strict timelines for refund processing based on the mode of payment used for booking. For tickets purchased via credit or debit cards, the refund must be processed within seven days of the cancellation, with the amount credited back to the original payment account. For cash payments, the refund would need to be provided immediately at the airline office where the ticket was purchased.

When tickets are booked through travel agents or online portals, the responsibility for issuing refunds will still lie with the airlines, as agents are considered representatives of the carriers. All such refunds must be processed within 21 working days of the request. This clause is intended to prevent situations where passengers are caught in disputes between travel agencies and airlines over refund responsibilities.

Importantly, the DGCA has made it clear that no airline will be permitted to charge additional fees merely for processing refunds, a practice that has often drawn criticism from passengers in the past.

Full Refund of Statutory Taxes and Fees

The regulator has also proposed that statutory taxes and charges — including the User Development Fee (UDF), Airport Development Fee (ADF), and Passenger Service Fee (PSF) — must be refunded to passengers in all cases where the ticket is not utilized, regardless of the reason for cancellation. This rule would apply even to promotional or special fares, where the basic fare might be non-refundable. The logic behind this is simple: since these fees are meant for airport services and government levies that are not consumed when a passenger does not travel, they should rightfully be returned to the consumer.

This marks a significant shift from current practices, where airlines often retain these fees even in cases of no-show or voluntary cancellation, leaving passengers with little recourse.

Name Correction and Credit Shell Policy

The DGCA’s draft also seeks to standardize rules for correcting passenger details, a common source of frustration for flyers. Under the proposed norms, airlines will not be allowed to charge passengers for correcting name errors within 24 hours of booking, provided the correction pertains to the same individual. This ensures that minor typographical mistakes in names — often made during online bookings — do not lead to unnecessary penalties or rebooking costs.

Additionally, the regulator has laid out clear rules regarding credit shells, which are credit balances offered to passengers instead of direct refunds. The DGCA insists that offering refunds as credit shells should be entirely optional, and not the default setting. This ensures passengers retain control over their refund method. Airlines must obtain explicit consent from passengers who wish to keep their refund amount as credit for future use.

In cases of medical emergencies, airlines would be required to either issue full refunds or provide a credit shell, depending on the passenger’s preference and supporting documentation.

Rules for Foreign Carriers

For foreign airlines operating to or from India, the DGCA has stated that refund policies will be governed by the rules of their home countries. However, the regulator expects that these carriers comply with the principles of fairness and transparency in dealing with Indian passengers.

A Push for Transparency and Accountability

The proposed changes reflect a broader push by the DGCA to strengthen consumer rights and align Indian aviation standards with global best practices. Regulators in the United States and Europe already mandate free cancellation or modification windows, strict refund timelines, and transparent fee structures. The DGCA’s proposals, once finalized, could bring India closer to such international standards.

The regulator has invited feedback from airlines, consumer groups, and the public until November 30, 2025, after which the final version of the revised Civil Aviation Requirements will be issued. Industry experts believe that while airlines may initially resist these rules citing commercial freedom and operational costs, the reforms are ultimately aimed at restoring passenger trust in the system — a crucial factor for the continued growth of India’s rapidly expanding aviation market.

With air travel in India expected to grow by double digits in the coming decade, the DGCA’s initiative could redefine the balance between consumer rights and commercial practices, ensuring that the interests of passengers are protected without stifling the business environment. If the draft is adopted in its current form, Indian passengers will, for the first time, enjoy a defined window of flexibility and faster, fairer refunds — making air travel not only more convenient but also more accountable.