Flyers may soon recover 80% fare for cancelling hours before flight as govt mulls insurance fix

India is preparing to roll out a system that could allow air passengers to reclaim a substantial portion of their ticket price—even if they cancel just hours before departure. The initiative, expected to launch within two to three months, aims to ease passenger concerns over losing money due to sudden plan changes, according to a report by The Times of India.

Currently, passengers who cancel within the last three hours before a flight are treated as no-shows, forfeiting their entire fare. Refunds for verified medical emergencies exist but remain inconsistent and depend on individual airline discretion.

To address this, the civil aviation ministry is working with domestic carriers to include a built-in insurance component in every ticket. Passengers won’t have to pay extra—airlines will partner with insurers to absorb the cost, potentially around ₹50 per ticket.

“We are exploring whether an insurance element can be added in the lowest fare category so that passengers get some refund. The details are being worked out,” a senior airline official said.

The move is designed to reduce the booking hesitation caused by uncertainty around last-minute emergencies. “This uncertainty of getting money back has to go and refunds have to become seamless,” said another industry source, citing frequent complaints over non-refundable tickets due to family tragedies or emergencies.

Estimates suggest passengers could recover up to 80% of their fare if they cancel up to four hours before takeoff. Airlines noted that online travel portals already offer optional cancellation insurance, and the proposed model could extend similar protection to all ticket holders automatically.

Industry insiders believe the system could be financially viable. “If only two or three passengers out of a flight of 200–300 make legitimate last-minute claims, the system becomes sustainable,” one airline executive said.

The Directorate General of Civil Aviation (DGCA), which receives frequent complaints about refund delays and restrictive airline policies, is also updating its refund rules. A draft framework is under review, aiming to establish minimum standards while respecting airlines' commercial autonomy.

By offering more flexibility without increasing base fares, the proposed system could make air travel more appealing and less financially risky for Indian passengers.