The new framework aims to make consumer protection universal by embedding it directly into the base fare of all domestic airline tickets.
- 80% Refund Guarantee: Passengers may receive up to an 80% refund on tickets cancelled as late as four hours before the flight’s departure.
- Automatic Enrollment: Unlike current “add-on” insurance offered by travel portals, this will be an inbuilt component. Every passenger is covered by default without needing to manually opt-in.
- No Extra Cost to Passengers: The government’s plan envisions that the insurance premium (estimated at roughly ₹50 per ticket) will be borne by the airlines through partnerships with insurers, rather than being added as a surcharge for the passenger.
- Medical & Family Emergencies: The primary intent is to cover “exigency cancellations”—unforeseen circumstances like medical emergencies or tragedies in the immediate family—which currently result in a total loss of fare.
Current Status vs. New Rules
The Directorate General of Civil Aviation (DGCA) is currently finalizing these norms alongside other passenger-friendly updates.
| Feature | Current “No-Show” Rule | New Proposed Rule (2026) |
| Cancellation Window | < 3 hours before departure | Up to 4 hours before departure |
| Refund Amount | 0% (Treated as No-Show) | Up to 80% of the ticket fare |
| Insurance Cost | Paid by passenger (Optional) | Paid by airline (Inbuilt) |
| Refund Type | Often “Credit Shells” or vouchers | Direct bank/source refund |
Why the Change?
- Addressing Grievances: Refund delays and “no-show” penalties account for a vast majority of passenger complaints filed with the DGCA.
- Boosting Confidence: The government believes that reducing the financial risk of last-minute cancellations will encourage more people to book flights with confidence, particularly for family visits.
- Standardization: Currently, refunds for medical emergencies are purely at the discretion of the airline. The new rule will create a uniform, predictable standard across all Indian carriers.
When will it start?
As of mid-January 2026, the Ministry of Civil Aviation and major Indian carriers (including Air India and IndiGo) are in the final stages of evaluating financial models with insurance companies. The policy is expected to be officially enforced and integrated into booking systems within the first quarter of 2026.
