Delhi court orders Akasa Air to pay Rs 1.08 crore to agency over ‘abrupt’ cancellation of 640 Goa tickets in peak season

District Judge (Commercial) Lalit Kumar was hearing a plea filed by ABS Tour & Travels, based in Kalkaji.

The court was tasked to determine if the said airline had unlawfully cancelled the group bookings after accepting advance consideration, and if so, whether the said travel agency is entitled to the loss of profit.

‘PNRs generated, contract binding’

• In commercial transactions, especially in the travel industry, group bookings for festive periods are made precisely to capitalise on predictable seasonal demand.
• The airline’s argument that they refunded the advance amount to the agency to restore them to their original position is legally untenable.
• The refund of principal does not extinguish the claim for consequential damages flowing from breach of a contract.
• The airline’s alternative offer involved a reduction of cancelled seats from 80 to 40 per PNR and imposition of new terms. Therefore, the refusal of the same from the travel agency cannot render the claim speculative.
• The court noted that once PNRs were generated and consideration partly accepted, a concluded contract came into existence as per the Indian Contract Act, 1872.

• The unilateral cancellation after the same amount constitutes a breach, unless justified strictly in terms of the governing conditions.
• It is placed on record that the agency has claimed a loss of opportunity arising from the cancellation of a confirmed group inventory during peak season.
• The airline concerned has failed to provide evidence to show that the claimed rate of Rs 17,000 per seat was unrealistic or improbable. They have not provided any expert evidence, system logs or backend records to demonstrate otherwise.
• The travel agency’s claim arises from the cancellation of specific, confirmed PNRs after acceptance of part consideration, during a peak seasonal window, and is supported by documentary and circumstantial commercial evidence.

‘Booking PNRs in peak season’

• ABS Tour & Travels is a travel agency particularly engaged in the business of tours and travels, which includes booking of air tickets and ancillary business.
• The travel agency’s business is carried out based on the business-to-business (B2B) model, wherein the plaintiff purchases air tickets in bulk and thereafter supplies the same to brokers.
• These brokers, in turn, supply such tickets to corporations and the end customer, and there is also a business-to-customer (B2C) model by which the agency supplies tickets directly to the end customers.
• The agency claimed that having been engaged in the business for more than a decade, it has garnered a good market reputation among its customers and is well known for its services of providing hassle free experience for booking of air tickets and ancillary services.
• It is further claimed that Pankaj Madan is the sole proprietor of this travel agency and has been duly authorised to contest the present case on behalf of the agency.
• On the other hand, the other party is an airline company that flies under the brand name “Akasa Air” and is a private limited company incorporated in India in November 2020. It was also pointed out that the airline, through its website, claims to be India’s fastest-growing and most dependable airline with 20 destinations and 40 routes in India.
• The travel agency claimed that they trusted such representation on the defendant’s website and decided to enter into a business relationship with the said airline.

• The travel agency, which registered itself as an agent on the airline website, entered into an agreement with the airline for purchasing passenger name record (“PNR”) in bulk for air travel through Akasa Air, and, accordingly, the airline consented to such an agreement
• It was claimed that on April 11, 2023 and April 12, 2023, the agency bought eight PNRs, and each of these PNRs comprised 80 seats.
• The agency, thus, booked a total of 640 seats through the eight PNRs for flights scheduled on various dates starting from December 23, 2023, to January 13, 2024, on the Delhi-Goa and Goa-Delhi sector.
• It is further submitted that the PNRs were generated after accepting 25% of the total booking amount towards the total consideration amount for the contract entered for these eight PNRs.
• The travel agency promptly paid Rs 4.82 lakh to the airline as a total 25% advance payment for the eight PNRs and was always ready and willing to make the rest of the payment as and when such payments became due.
• However, it was claimed that all of a sudden, on May 29, 2023, after the passage of more than 45 days from the date of purchase of the eight PNRs, the said airline abruptly cancelled the entire booking of the agency without giving them any prior intimation.
• The agency claimed to communicate with the airline seeking the reasons for such cancellation, but got no response.
• In August 2023, the airline allegedly refunded the 25% advance amount paid by the agency towards booking of each of the eight PNRs without there being any request for the same.

‘Alternative offer of airlines’

• It was further claimed by the travel agency that after repeated requests and a meeting in the first week of June 2023 with one of the representatives of the airlines, the agency was offered fares/rates which ranged to approximately Rs 9,000.
• It was also mentioned that the said airline reduced the number of cancelled seats per PNR to 40 instead of 80.

‘Dynamic airfare’

• The said airline has contended that the agency’s claim for damages to the tune of Rs 1. 08 crore is speculative, hypothetical and not supported by any evidence placed on record.
• They further emphasised that the agency admittedly did not sell even a single ticket out of the 640 seats booked, and the 25% advance amount was refunded.
• It was lastly submitted that the airfare pricing is dynamic and uncertain, and the travel agency failed to mitigate the alleged loss.

‘Loss of reputation, mental agony’

• The agency claimed that this has caused huge losses, such as loss of market reputation, loss of customers, monetary loss, loss of profits/gains, wrongful loss, etc, along with mental agony and harassment.
• It was claimed that the said airline was guilty of breach of the contract entered into between them since the same was cancelled after accepting part consideration from the agency and the generation of PNRs.
• The agency claimed that they specifically bought the PNRs near the dates of Christmas and New Year from Delhi to Goa and vice-versa, keeping in view the well-known fact in the travel industry that there would be high demand during that time and ticket rates skyrocket when it’s nearing these occasions.
• The agency further alleged that for this very reason, the said airline had cancelled all the eight PNRS purchased by them to sell the tickets themselves at these soaring rates at the relevant time.

Expert speak: ‘Judgment strengthens consumer rights’

Airlines must ensure complete transparency when it comes to fares and booking conditions at the time of ticket confirmation, said advocate Tushar Agarwal, founder and managing partner, CLAP Juris.

“Hidden or uncommunicated requirements, such as higher advances for large bookings, cannot be used as a post-hoc justification for cancelling confirmed seats,” he said, adding, “This judgment strengthens the consumer’s right to clear terms and fair dealing.”

Advocate Himesh Thakur, associate partner at PSL Advocates and Solicitors, said that airlines must honour bookings made well in advance, particularly during peak festive seasons such as Christmas and New Year. “Such sudden cancellations without prior notice place travel agencies in severe financial distress, as these agencies depend on such profits for their sustainability,” Thakur pointed out.

The aviation sector “thrives on credibility”, said advocate Rahul Jajoo, while underlining the importance of transparent policies and consistent adherence to commitments for “long-term” consumer confidence. “This ruling sends a strong message that airlines cannot arbitrarily alter confirmed arrangements, especially when such actions cause measurable financial harm,” he added.

Akasa Air’s response

Akasa Air recently acknowledged the order passed by the Saket Commercial Court in this matter related to the commercial dispute and said that they respect the judicial process and are currently reviewing the detailed order with their legal counsel.

“Akasa Air ensures fair and transparent dealings with all our travel partners, who form an integral part of our
ecosystem,” the airline stated in its response to The Indian Express.

They also mentioned that, as the matter is currently subject to further legal evaluation and potential appellate proceedings, they will refrain from making any further comments at this stage.