Low-cost carriers in India have lobbied the Indian regulator to allow them to introduce non-refundable fares in a bid to lower ticket prices overall to increase competition, and to offset the effects of excess capacity by lowering “last-minute” ticket prices.
SpiceJet COO Sanjiv Kapoor wrote to the aviation ministry, stating that demand for air travel has reduced in India, which has led to lower load factors: "There are occasions when we fly with a lot of empty seats and customers complain why last-minute fares are so high. We are unable to discount our unused inventory close to the date of travel as current regulations do not allow us to offer restricted non-changeable, non-refundable fares."
The regulator has previously mandated airlines to refund taxes and surcharges upon cancellation of a ticket.
The regulator stated: "Refund of tickets by airlines has become a major source of grievance among passengers. The complaints are of three kinds: delay on refund of unused tickets; the amount refunded and the policy of not refunding but adjusting against tickets for future travel.