SC stops airlines from charging transaction fee

Passengers who book air tickets through agents will not have to fork out extra money with the Supreme Court today restraining airlines from levying transaction fee in any form on them.

"The transaction fee shall not be collected from any passenger in any form or under any other name," a bench of justices D K Jain and Madan B Lokur said.

The apex court also directed the Directorate General of Civil Aviation to examine the tariff structure of the airlines in view of their wide range of base prices for air tickets.

"There are several bands for fixing the base price which in certain cases range from Rs 1120 to Rs 36000...We are of prima facie view that regarding wide range of basic fair, it would be necessary for the DGCA to examine the tariff structure of the airlines," the bench said.

The bench rapped the DGCA for not enforcing its own direction dated December 17 last when it had restrained the airlines from charging transaction fee from passengers.

"We regret to note that despite provision is there not to charge transaction fee, the DGCA failed to enforce its own direction," the bench said, adding "It needs our immediate intervention for non-compliance of direction issued by the DGCA. The airlines cannot charge transaction fee from customers."

"We are of the view that circular of DGCA dates December 17, 2012 is still in vogue and transaction fee cannot be charged by the airlines," the bench said.

Transaction fee was introduced by the airlines after they adopted a zero commission policy for their agents. Under transaction fee, agents charge customers any amount of their choice and there is no uniformity in it.

Senior advocate U U Lalit, appearing for Federation of Indian Airlines (FIA), urged the apex court not to pass any order as it would challenge the DGCA circular before an appropriate authority.

The apex court, however, turned down the plea saying, "We cannot shut our eyes that circular is being violated and DGCA is not able to enforce it."

"We are with you except on transaction fee. It has been decided by the regulator and violation of circular cannot be permitted," the bench said.

The court rapped the DGCA for not being able to enforce its rules, saying the regulator was not concerned about the passengers.

"Don't take it casually. Why do you create embarrassment for yourself. Don't issue any circular which you cannot enforce," the bench told DGCA.

"There is lack of transparency as far as passengers are concerned and poor passengers do not know what is happening," the bench remarked over the transaction fee being levied by the airlines.