IAAI Circular – Indigo Airline Unfair Refunding Process

Ref: IAAI/084-20/BE/CIRCULAR                                                                     22st May 2020

Sub: Indigo airline – unfair ticket refunding process

Dear Colleagues and Partners
Greetings from IAAI.

It has been brought to our attention that indigo airline is processing flight reservation cancellations and the
proceedings are being protected in the form of a credit shell against the passengers PNR instead of the Agent who
created that PNR (your sales notification dated 18th May 2020 refers). And interestingly, this credit shell is
exclusively protected for the same passenger to utilize within 1 year from the usual date.
We feel that such a unilateral decision taken by the Indigo Airlines is unfair, illegal and arbitrary. The Airline can opt
for this policy for the passengers who made bookings/ticketing directly through your website.
Travel Agents are the backbone of an airline system. They are representing the airlines directly and responsible for
the flight reservations and the ticket /standard documents issued on their behalf. Moreover, in the Indian scenario,
agents are extending credit facilities to their clients or corporates, and make remittance to airlines either through
spot payment or deposit thresholds. This means that, as per the Indigo business model, Travel Agents have to make
advanced deposit payments in their Agency Credit Account provided by Indigo and have to top up funds according
to their usage. In other words, before collecting money from passengers, Agents have to shell out payments to the
Carrier by using their own working capital.
As per the aforementioned sales notification dated 18th May 2020, Travel Agents will lose a significant amount of
money if the Credit Shell is formed in the name of Passenger, particularly in a scenario where the Passenger issued
the ticket on Credit basis and did not pay the money to the Agent.
Hence, we wrote to Mr. Achin Arora, Sales Manager, requesting that the tickets booked by an Agent, upon
cancellation, the residual value of the canceled ticket should be credited directly into the Agents Credit Account
without any delay. And, the Agents will have the flexibility to use this money for fresh ticketing, refunding, or reissuing, based on his business tactics and strategies.
Also, mentioned that, when there are no credit facilities available for Low-cost carriers like M/s. Indigo Airlines, it is
imperative that the Carrier should look into the business modalities of “Principal & Agent “and formulate policies to
protect the interest of both the parties involved in the business.
For IATA Agents association of India (IAAI)