Travel companies have witnessed a jump in customers opting for an added coverage in their airline bookings which allows them to cancel or modify their plans without pinching their wallets.
The option, which comes at a nominal fee, allows for a full refund of the airfare in case of a cancellation, a change of flight or a even change in airline.
The intermittent enforcement of restrictions brought by the Covid-19 pandemic during the last couple of years led to this surge in consumer demand for this booking option. From less than one in ten customers choosing the ‘full refund’ option three years ago, now at least one in every four customers choose the option now. That is, the percentage of customers going for this option has risen from 10% to 25%.
Aditya Agarwal, chief financial officer, Cleartrip said, “The cancellation charges are very steep in the airline industry. So, we came up with a product where for a small fee, less than 10% of the value of the ticket, you get a flexible fare which allows for a last-minute change or cancellation and you get a full refund.”
Airlines charge a cancellation fee that typically ranges between ₹3,000 to ₹3,500 per passenger. Full-service carrier Vistara allows for changes in the booking after a charge of ₹3,000 per customer. Market leader and low-cost carrier IndiGo also charges ₹3000 per customer as cancellation fees.
Flipkart-led Cleartrip, India’s second largest travel company, charges ₹200-500 per booking for providing full refund of changes of cancellation to bookings. Market leader Makemytrip allows for such options with prices starting at ₹99 per customer if the cancellation is done a minimum of 24 hours prior to flight departure. Yatra.com is offering the feature for free till April 30, 2023.
Sabina Chopra, COO, Corporate Travel Head and Industry Relations, Yatra.com said, “Travel planning can be stressful, especially with the unpredictability of circumstances. Our feature is available on Yatra.com for all domestic flights and customers can claim full refund of the ticket value in the event of a cancellation.”
While there is no travel or stay restriction anywhere in India due to Covid-19 presently, airlines are getting cautious over the rising number of Covid-19 cases in the country with more than 10,000 new cases getting registered every day. Travel companies are therefore expecting a continued demand for the ‘full refund’ feature.
While the additional feature causes a burden on the financial books of the travel companies, Cleartrip said it is now looking to expanding the programme to its other offerings.
“We have done this with the domestic airline industry, we have the option to doing it for international flights and hotels too. This surely comes at a cost but the benefit we get from aspects like customer retention, more than pays for that. The same customer also does 4-5 transactions in a year with us,” Agarwal added.