Supreme Court prohibits airlines from charging transaction fee ‘in any form’

The Supreme Court on Wednesday prohibited all airlines from charging "transaction fee" from passengers "in any form or under any other name" while also reproaching the Director General of Civil Aviation (DGCA) for its "hesitant" attitude in tightening the leash around the defaulting airlines.

Transaction fees are charges that air passengers pay travel agents for booking flights. It usually varies between 3 to 6 per cent of the total fare.

A Bench of Justices DK Jain and Madan B Lokur took it upon itself to make enforceable a December 17-circular of the aviation regulator after underlining that the regulator had "regretfully" done nothing but only "beg" and give "verbal cautions" to the airlines. The DGCA circular had restrained airlines from levying transaction fee from passengers through agents but it accepted before the court that it had not taken action against any airline till date for violation of its order by continuing to charge such fee.

After being pointed out by the counsel for the Federation of Indian Airlines (FIA) that their challenge to the validity of the circular had been relegated to the civil aviation secretary for adjudication, the court said that their restraint order will be operational till any further order is passed by an appellate authority.

Further, the Bench, left "surprised" and "amused" at the wide range and erratic pricing of the air tickets, also directed the DGCA to examine the tariff structure, submitted to it by the airlines "keeping in view of the fact that there was no indication as to how the base fare is to be charged when a ticket is booked seven days in advance of the travel date".

"Our concern is that these fare bands give you an unilateral discretion. This structure is quite capable of being exploited against the interest of passengers. You must disclose the availability in different slabs so that there is at least some transparency," it said.

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