India’s aviation sector is moving toward one of the most significant reforms in its passenger rights framework. A new proposal under government review may soon allow passengers to receive refunds on flight tickets cancelled as close as three hours before departure. This change is being designed to provide relief to travellers who currently lose their entire fare when they are forced to cancel at the last moment.
At present, cancellations made within three hours of departure are treated as a no-show. This means passengers do not qualify for any refund, regardless of the reason for cancellation. Many travellers have long complained that this rule is too strict, especially in cases of last-minute medical emergencies, sudden work changes or urgent family situations. The upcoming proposal seeks to address these concerns by offering a structured and predictable refund system.
A key part of the new system will be the addition of an embedded insurance component in every airline ticket. This insurance will be included automatically in the base fare. Passengers will not be required to buy any separate add-on policy. The embedded coverage is designed to compensate passengers with a significant portion of their fare, expected to be around 80 percent, even when cancellation happens shortly before the flight. This could dramatically reduce the financial burden on travellers who are unable to fly due to unexpected disruptions.
Aviation experts state that this policy could change the overall behaviour of air travellers. Many passengers often avoid booking early because they fear losing money if plans change. With this new refund structure, travellers may feel more confident booking flights in advance. The reform is also expected to reduce disputes between passengers and airlines related to cancellations and refunds.
In addition to the three-hour refund policy, regulators are evaluating another consumer-centric reform. This second proposal suggests a 48-hour look-in window after ticket purchase. During this period, passengers would be allowed to modify or cancel their ticket without any penalty. If approved, this two-step system would offer flexibility both immediately after booking and right before departure.
Airline industry officials believe these changes are likely to improve customer satisfaction and may even increase ticket sales. While airlines will need to adjust their internal systems and pricing models to accommodate the insurance component, the long-term benefits for passengers are considered substantial.
The exact details of the policy, including the refund percentage, eligibility conditions and enforcement mechanisms, will be clarified once the final guidelines are approved. The aviation ministry is expected to release a formal notification after consultations with carriers and insurance partners.
If implemented, this will be one of the most traveller-friendly reforms in India’s aviation history. Passengers may finally have financial security even during last-minute emergencies.
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