Travel agents say that airlines charging `300 as Refund Application Fee (RAF) to travel agents is illegal and suggest that an agreement must be made between the travel associations and airlines to stop the practice.
Sharing details about why RAF and GST (K3) on RAF is not applicable, Pawan S Jain, MD, Belair, said that no airline rules by any airline or on the fare basis suggest any charges of `300 + GST. “If this RAF is not written in the fare basis of the airline, then it’s not applicable. But airlines are pressurizing the agents to pay this amount, which used to be there in the times of paper tickets,” he said.
“All IATA airlines abroad are not anymore charging the old traditional RAF `300, which is being charged only in India as a ‘norm’ without any IATA rules. Earlier, paper tickets had substantial cost of about $20 and ‘additional time cost’ was required to check each coupon for the correctness and calculation of refund by airline. This has not been the case since e-ticketing. With the automation, e-ticketing, all actions for refund are done by the agents and not airlines.”
Jain pointed out that one can check with many airlines that RAF + GST is not being charged and no IATA rule mentions RAF charge. “Some airlines for reasons best known are still imposing `300 RAF charges + GST (suggesting the charges as an old norm). This easy money goes in pockets of the airlines,” he underlined.
Lalith Jain, Joint Treasurer & MC Member – TAFI India, agreed, saying, “RAF charged by airlines in today’s context is incorrect and should be stopped. This was initially started when physical paper tickets were issued and to cover the cost of such tickets, RAF was introduced. A few airlines have non-refundable fares but still charge RAF for refunding taxes and statutory fees to customers. To top it all airlines not only charges penalties and collect the same by raising ADM for wrong issuance of tickets or incorrect ticketing procedures but charge an ADM handling fee.”
He advised that agreement must be made between the travel associations and airlines to stop the practice of collecting RAF and separate fees for handling ADM and cancellations, or the same should be regulated by DGCA/ MoCA or other regulatory bodies in India.
Rai Achal Krishna, CEO, Travel Assistance Bureau and MC Member, TAFI, said that RAF is simply put another module and cash saving exercise the airlines have introduced to make an extra buck. “Since a cancellation is already specified and charged on the ticket, it is a moot question on how the airline justifies this,” he said.