Some travel agent associations and service providers are considering applying to the National Company Law Tribunal (NCLT) to seek pending dues as the civil aviation regulator asks Go FIRST airline to provide refunds to passengers affected by the suspension of the airline’s flights, according to three people with knowledge of the development.
Under cover of anonymity, a high-ranking government official stated, “The airline was already directed on 4 May to process refunds as per regulatory provisions.” If a traveller requests a refund, we’ve instructed them to provide cash rather than a credit to their shell account.
About 900 crore is owed by the airline to travel agencies and passengers for pre-paid flight reservations.
Since the 3rd of May, when flights were suddenly halted, the airline has given passengers and travel agents credit shells that can only be used to buy Go FIRST trips.
As the airline has ceased operations, the credit notes are useless to passengers and travel agencies around the world.
Jyoti Mayal, president of the Travel Agents Association of India, told Mint, “This is a very big concern for us, as the airline is trying to take away our and people’s money paid to them for bookings by moving for insolvency.” If the airline is successful, this will set a terrible example. We are keeping in touch with our legal counsel and following developments in court. As a group, we are weighing our legal options, which may include relocating NCLT.
In order to safeguard client payments, some travel agencies are considering making the switch to NCLT on their own.
“There should be a mechanism that ensures money paid by passengers is refunded in case of airline failure,” said Ajay Prakash, president, Travel Agents Federation of India. Passengers and travel agencies alike lose a lot of money due to incidents like this in India. As an organisation, we are unable to make the transition to NCLT, but we stand ready to lend any support our members may need should they decide to make the switch.
Prakash emphasised that passengers should demand a cash refund rather than a credit note and use social media to spread the word.
He argued that the government should examine mechanisms like insurance to safeguard passengers in the event of airline disaster.The business reported 77,500 cancelled passengers across 4,118 flights in the last 30 days in a filing with the NCLT.
The first people to take airlines to court won’t be travel agents.
The airline has already had two complaints filed against it in the NCLT, and is currently waiting for its own complaint to be admitted. SS Associates Services Private Ltd, a transportation company, has filed a petition seeking 3 crore, and a pilot has filed a petition seeking more than 1 crore in unpaid wages.
The airline contacted the NCLT today to request an immediate ruling on its request for a moratorium, which it first made on May 4 after eight lessors had contacted the civil aviation regulator in an effort to de-register 20 aircraft. The airline also informed the tribunal that it has been granted access to the jets for maintenance purposes after lessors began taking custody of the aircraft.
Meanwhile, the tourism sector is lobbying the government to protect its investments in GoAir by requesting that the airline withdraw its case before the National Company Law Tribunal.
We’d like the Department of Civil Aviation to sort this out. “Go FIRST is claiming they will deposit the refund into the agent’s account, but that money can’t be used to pay back customers,” Rajiv Mehra, president of the Indian Association of Tour Operators, said. Because of this incident, already high summer airfares will remain abnormally high during the peak domestic travel season.
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