Case Study: Airline Compensation | Flight Compensation

Not Allowed to Board a Flight? The airline could be at fault

In the recent case of Air France versus OP Srivastava & Others (First Appeal No. 310 OF 2008), the National Consumer Disputes Redressal Commission (NCDRC) held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency in service on the part of the airline. Let’s follow the details of the case to understand what to do when it happens and what airline compensation to expect, in addition to what legal options are available to aggrieved passengers.

On 05.11.2002, the complainants, who held senior management positions in the Sahara Group of Companies, had booked their ‘H’ Class confirmed air tickets with Air France through their agent, for travelling to Paris to attend a business meeting. As per their travel itinerary, their departure from Delhi to Paris was on 06.11.2002 and return was on 09.11.2002. Due to change in the schedule of the meeting, at Paris, on 08.11.2002 they requested for change of date of return journey from 09.11.2002 to 10.11.2002. The complainants were issued three ‘K’ Class confirmed tickets from Air France at Delhi, and for this change they were required to pay a differential amount of Rs 10,270 per person.

As it happened, on 10.11.2002 they were not allowed to board Flight No. AF-148 at Charles De’ Gaulle Airport at Paris due to overbooking. The complainants said that they were subjected to humiliation and embarrassment by the staff of Air France. Their tickets were also not endorsed to travel by Air India Flight No. AI-146, departing on the same day. According to the complainants, a valuable 24 hours were lost. They being commercially important persons, (CIP), their every minute was precious for the company; and in their absence, the schedule of meetings got disturbed, resulting in a monetary loss of Rs 5,000,000 to the company as consequential business loss.

Accordingly, the complainants filed a consumer case before the Uttar Pradesh State Commission, praying for direction to Air France to return to them the excess amount charged on tickets with 24 per cent compound interest and a compensation of Rs 5,000,000 for the losses suffered by the company and mental agony undergone by them. Air France, on its part, claimed that as per the accepted practice the passengers were given 300 euros each (equivalent to approximately Rs 53,600) besides free accommodation at a hotel with meals, two telephone vouchers and nine telephone cards for denying boarding. After availing these facilities, the complainants had filed the complaint in order to take undue advantage of the situation.

The UP State Commission allowed the complaint and directed Air France to pay to each of the three complainants a sum of Rs 630,000, totalling 1,890,000, with simple interest @10% p.a., within a period of one month from the date of the order, with a default stipulation of enhanced interest @15% p.a. on the said amount if the same was not paid within the stipulated period. Aggrieved with the said order, the Opposite Party filed an appeal in National Commission.

Air France stated in their appeal before NCDRC that denied boarding is an accepted practice internationally and nationally, and for the same the complainants were sufficiently compensated by being provided with free accommodation and other facilities. The airlines further alleged that the complainants were trying to take “undue advantage of the situation”.

Dismissing the contention of Air France, the National Commission said that the practice of overbooking may be a commercially viable international practice being adopted by all the airlines, probably to ensure that seats in the flights do not go vacant in the event of no-shows by booked passenger(s), but the same cannot be at the altar of the passengers. Not permitting a passenger holding confirmed ticket to board a flight amounted to deficiency of service on the part of the airline, a bench headed by NCDRC President Justice DK Jain said.

The National Commission also said that if a freehand practice of overbooking was approved, it could cause havoc against the interest of the ticketholders as the airlines might invoke the malpractice of overbooking indiscriminately and beyond reasonable dimensions. Instead of taking recourse to this sort of policy, the airlines must impose stringent conditions for the eventuality of cancellation of tickets. To be specific, the airlines may lay down a condition that in the case of a long journey like the one at hand, if a passenger does not report for boarding up to a certain time before departure, his ticket would be cancelled or refund would be permissible to a minimal extent. Refunding of money equivalent to the entire price of the ticket or with minor deductions to a passenger under contemplation of earning profit by overbooking of the tickets to a large number of passengers would create instability, indiscipline and unfair trade practice, the National Commission said.

The NCDRC held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency of service on the part of the airline. The National Commission upheld UP State Commission’s decision, barring the quantum of compensation, and directed the premier French national carrier to pay a compensation of Rs 400,000 each to the three officials of Sahara Group for causing inconvenience and harassment to them by denying boarding on the Paris–Delhi flight in 2002.

Cause of Action

Another hotly contested issue raised by Air France was that the UP State Commission had not proper territorial jurisdiction to entertain the complaint. The NCDRC observed that the cause of action, wholly or in part, arose at Kanpur.

The NCDRC relied on the Supreme Court case Kandimalla Raghavaiah & Co. versus National Insurance Co. Ltd. (2009) 7 SCC 768), where the expression ‘cause of action’ was defined. It was said by the Supreme Court that it is a bundle of essential facts necessary for the plaintiff to prove and obtain a decree but does not comprise evidence necessary to prove such facts. Failure to prove such facts would give the defendant a right to judgement in his favour. Cause of action thus gives occasion for, and forms, the foundation of the suit. The question of territorial jurisdiction must be decided on the facts pleaded in the petition. National Commission relied on another Supreme Court case, Alchemist Ltd. & Anr. versus State Bank of Sikkim and Ors. (2007) 11 SCC 335, where it was said that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless, it must be a part of cause of action, nothing less than that.

After observing the aforesaid judgements, the National Commission agreed with the State Commission finding that a part of the cause of action did arise at Kanpur when the tickets were purchased and, hence, it was vested with territorial jurisdiction to entertain and deal with the complaint. The air tickets were purchased through an agent of Air France based at Kanpur who, on receipt of the consideration towards the cost of the tickets, had created PNR through Amadeus (host system of Air France). Thus, UP State Commission had proper territorial jurisdiction to entertain the matter.

Consumer Voice’s advice to consumers

Passengers aggrieved by the action of an airline denying boarding can approach consumer as well as civil courts to claim damages, in addition to minimum damages prescribed under the DGCA regulations. A passenger who holds a confirmed ticket has full right to board the flight and that should not be denied by the airline. In case of overbooking where a passenger is denied boarding, he/she should get compensation from the airline.

Recently, vide order dated 02.02.2018 (W.P.(C) 12006/2015 & C.M. No. 31848/2015W.P.(C) 12006/2015 & C.M. No. 31848/2015), the High Court of Delhi clarified the compensation and refund procedure in case the passenger is denied boarding even after having a confirmed ticket. The Delhi High Court also said that airlines must pay for denying seats to those with confirmed tickets. A passenger has the right to seek compensation in case of denial to fly due to overbooking, over and above its rules that provide slab-wise refund. DGCA 2010 rules do not put a cap on the compensation that can be demanded from the airline in case of overbooking and a passenger has full right to approach civil and consumer courts for relief.

The union aviation ministry has recommended increasing compensation to up to Rs 20,000 per flyer for deficiencies in airline services such as flight delays and cancellations. The ministry will soon put up the draft for public comments. The airlines are against these suggestions on the ground that domestic airfares in India are among the lowest. The Federation of Indian Airlines has also opposed it, saying that the existing rules and compensation levels already safeguard passenger interests in a fair and adequate manner, and increasing the compensation levels will only result in an increase in costs for airlines.

Consumer Voice supports the recommendation made by the aviation ministry to increase the level of compensation.