New passenger- friendly air travel rules

Free cancellation in 24 hrs, airlines to pay for delays, lost baggage

The government on Tuesday proposed draft rules for the benefit of passengers that includes a provision for them to be given a “lock- in option for 24 hours” from time of purchase of ticket wherein they can cancel or amend tickets with the airline without any cancellation charges. This is provided the booking was made at least 96 hours before the time of departure.

According to the draft rules, passengers will also be compensated for flight delays in case they have missed connecting flights. In such cases, if the delay is over three hours, or between four to 12 hours or more than 12 hours, passengers are entitled to compensation of ` 5,000, ` 10,000 and ` 20,000 respectively. The draft rules further stipulate that airlines cannot levy cancellation fees that total more than the basic fare plus fuel surcharge.

Also, if the aircraft is on the tarmac for more than one hour, “sufficient and free- of- charge hot snacks and beverages” are to be provided to passengers. But if the aircraft is on the tarmac for 90 minutes with no possibility of departure in the next 30 minutes after that, passengers have to be deboarded. The draft rules also state that if the flight delay is communicated more than 24 hours prior to the original scheduled time and if the delay is more than four hours, the airlines will have to offer an option of full refund of the ticket amount to passengers. If the delay is such that the flight will take off only the next day, airlines have to offer “additional free- of- charge hotel accommodation” to

National carrier Air India may not be sold after all if the government finds the bid price to be inadequate.

Union civil aviation secretary R. N. Choubey on Tuesday told reporters, “The government retains the right to sell or not to sell ( stake in Air India) if the bid price is found to be inadequate.”

According to the procedure, the floor price ( base price for the airline) is decided by the transaction advisor but the government is apprised of it once the financial bids are opened in the Request for Proposal process.

The government, as the owner of Air India, has the right to modify the floor price.

If the government finds that the bid price is lower than the floor price, it could give rise to a situation wherein the government may not sell the national carrier since it would then be a lossincurring move.

It may be recalled that the government had recently extended the Expression of Interest ( EoI) submission deadline from May 14 to May 31 this month while the deadline for intimation to Qualified Interested Bidders was extended from May 28 to June 15 this year. Private firm Ernst and Young has been appointed the “Transaction Adviser” ( TA) for the process.

The Union government had a few weeks ago issued a “preliminary information memorandum ( PIM)” for “inviting the EoI for Strategic Disinvestment” of lossmaking national carrier Air India through a bid process.

Through this, the Centre aimed to sell 76 percent stake of the lossmaking airline.

Currently, the government holds 100 percent stake in the airline.

The memorandum covers disinvestment of Air India Ltd along with Air India Express Ltd ( lowcost arm and subsidiary of Air India) and the Air India SATS Airport Services Pvt Ltd ( AISATS) which pertains to the ground handling.