Cancellation Fee of Airlines

By | July 22, 2016
(Last Updated On: July 22, 2016)

Cancellation Fee of Airlines

Under the provision of prevailing regulation (Sub Rule (1) of Rule 135 of Aircraft Rules, 1937), every air transport undertaking engaged in scheduled air services is required to establish tariff having regard to all relevant factors, cost of operation, characteristics of service, reasonable profit and the generally prevailing tariff including the cancellation fees of pre-booked air tickets. Airlines remain compliant to the regulations so long as the cancellations charges levied by airlines are displayed on their website. The Directorate General of Civil Aviation (DGCA) has issued Civil Aviation Requirements (CAR), Section-3, Series M, Part-II on “Refund of airline tickets to passengers of public transport undertakings”. The CAR specifies that the statutory taxes and User Development Fee (UDF)/ADF/Passenger Service Fee (PSF) shall be refunded by airline in case of cancellation, the cancellation charge shall not be more than the basic fare plus fuel surcharge, airline shall not levy any additional charge to process the refund and refund process is to be completed within 30 working days.

This information was given by Minister of State for Civil Aviation, Shri Jayant Sinha in a written reply to a question in the Lok Sabha today.

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About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email :

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