Air tickets may soon include in-built insurance offering 80% refund on late cancellations

New Delhi: Air travellers in India may soon be protected from losing their entire fare due to last-minute cancellations. According to TOI, the government is reportedly planning a major passenger-friendly reform by introducing an in-built travel insurance feature within air tickets, potentially offering refunds of up to 80% for exigency cancellations made just hours before departure.

This new system, currently under discussion with major Indian carriers, is expected to be rolled out within the next two to three months.

How the new refund system will work

Currently, cancelling a flight within three hours of departure is considered a 'no-show,' resulting in the entire booking amount being lost, except for rare, discretionary full refunds for proven medical emergencies.

The proposed system aims to change this process:

Automatic insurance: The insurance component will be automatically included in the ticket, even in the lowest fare category.

Rs 50 on every ticket: A premium of about Rs 50 per ticket could allow up to 80% refund for cancellations made up to four hours before departure.

High refund potential: Reports suggest this mechanism could facilitate up to 80% refund on tickets cancelled up to four hours before the flight's scheduled departure time.

Ending the fear of losing money

The move is being driven by the aviation ministry's goal to make refunds "seamless" and remove the uncertainty that often discourages people from booking flights due to the fear of losing money over last-minute tragedies or emergencies.

An airline official added that discussions are underway: "We are exploring whether an insurance element can be added in the lowest fare (category) so that passengers get some refund. The details are being worked out."