New Delhi: The Directorate General of Civil Aviation (DGCA) has issued revised Civil Aviation Requirements (CAR) aimed at streamlining the airline ticket refund process and safeguarding passenger interests against unfair practices.

The new regulations, which will come into effect on March 26, 2026, follow a surge in passenger grievances related to refund delays and the controversial practice of holding refunds in “credit shells”.

Strict Timelines for Refunds

Under the revised guidelines, airlines must adhere to defined processing timelines based on the original mode of payment:

• Credit Card Payments: Refunds must be credited to the passenger’s account within seven days of cancellation.

• Cash Transactions: Refunds must be made immediately at the airline office where the ticket was purchased.

• Bookings via Travel Agents/Portals: For tickets booked through third-party agents, the responsibility for processing the refund rests with the airline, which must ensure completion within 14 working days.

Introduction of 48-Hour ‘Look-In’ Window

In a significant move to enhance passenger flexibility, the DGCA has mandated a 48-hour “Look-in” option. This provision allows passengers to cancel or amend their booking without additional charges within 48 hours of purchase, provided the flight departure is at least seven days away for domestic flights and 15 days away for international flights.

Mandatory Tax Refunds and Cap on Cancellation Charges

The regulator has clarified that airlines must refund all statutory taxes and fees, including the User Development Fee (UDF), Airport Development Fee (ADF), and Passenger Service Fee (PSF), in cases of cancellation or no-show. This rule applies across all fare categories, including promotional and “non-refundable” tickets (with respect to taxes).

Further, cancellation charges cannot exceed the sum of the basic fare and the fuel surcharge. Airlines are also required to prominently display cancellation charges at the time of booking and provide a clear break-up of the refundable amount on the ticket or their website.

No Default Credit Shells

Addressing a major concern among passengers, the DGCA has stated that holding refund amounts in a credit shell shall be solely at the passenger’s discretion and must not be adopted as a default practice by airlines.

Move to Protect Passenger Interests

The government observed that these measures were necessary to “stem the growing dissatisfaction among passengers” regarding refund procedures. While reiterating that it does not intend to interfere with commercial practices of airlines, the DGCA noted that the volume of complaints concerning delayed refunds and forced adjustments for future travel warranted the establishment of uniform minimum benchmarks. DeshGujarat