India’s New Aviation Law Raises the Compliance Bar
India’s aviation sector is expanding at an unprecedented pace. With rising passenger traffic, increasing airline competition, digital ticketing platforms and growing consumer awareness, passenger disputes have become a significant regulatory and reputational concern.
The enactment of the Bharatiya Vayuyan Adhiniyam, 2024[1] marks one of the most important reforms in Indian civil aviation in decades. While much attention has focused on the replacement of the colonial-era Aircraft Act, 1934, the more significant development for airlines and aviation businesses is the Government’s clear intention to strengthen regulatory oversight and improve enforcement of passenger rights.
For airlines, airport operators, charter operators, travel aggregators and aviation service providers, passenger rights are no longer merely a customer service issue—they have become an integral part of regulatory compliance, operational governance and brand management.
This article examines how the new legal framework reshapes passenger rights and what businesses operating in the aviation ecosystem should be doing to minimise regulatory and commercial risk.
A Shift from Administrative Guidance to Stronger Statutory Oversight
For many years, passenger rights in India were primarily governed through the Directorate General of Civil Aviation’s (DGCA) Civil Aviation Requirements (CARs) and the Ministry of Civil Aviation’s Passenger Charter.
Although these regulations provided detailed guidance on compensation, refunds and passenger facilities, enforcement largely depended upon administrative mechanisms.
The Bharatiya Vayuyan Adhiniyam, 2024 changes this landscape by providing a stronger legislative foundation for aviation regulation. Together with the existing CARs and India’s obligations under the Montreal Convention, the new legislation creates a more comprehensive compliance framework where regulatory violations may attract stronger enforcement action, including statutory penalties.
For aviation businesses, this reflects an important regulatory shift—from merely prescribing passenger obligations to actively enforcing them.
Passenger Rights Are Now a Corporate Compliance Issue
Passenger rights today extend far beyond refund policies. Airlines are expected to demonstrate compliance across multiple operational areas, including:
- timely refunds of cancelled tickets;
- transparent fare disclosure;
- compensation for denied boarding;
- obligations arising from flight delays and cancellations;
- baggage liability;
- accessibility for passengers with disabilities;
- grievance redressal mechanisms; and
- regulatory reporting to the DGCA.
Failure to comply can result not only in customer dissatisfaction but also regulatory investigations, financial penalties and reputational damage.
Refund Obligations Demand Operational Discipline[2]
DGCA’s Civil Aviation Requirements prescribe strict timelines for processing refunds.
Among other obligations:
- credit card refunds must generally be processed within seven days;
- airlines remain responsible for refunds even where bookings are made through travel agents or online platforms;
- statutory taxes and airport charges cannot be withheld on unused tickets; and
- passengers must have the option of refunds instead of being compelled to accept credit shells.
These requirements require airlines to maintain efficient financial and customer service systems while ensuring consistent compliance across third-party booking channels.
Flight Disruptions continue to be the greatest source of Regulatory Exposure[3]
Denied boarding, cancellations and flight delays remain the most common sources of passenger complaints.
The applicable Civil Aviation Requirements provide detailed compensation mechanisms depending upon:
- notice provided before cancellation;
- duration of delay;
- availability of alternate flights; and
- circumstances beyond the airline’s control.
Airlines are also required to provide meals, refreshments, hotel accommodation and transportation in specified situations.
Equally significant is the requirement for every airline to appoint designated Nodal Officers and Appellate Authorities and maintain an effective grievance redressal system.
These obligations are no longer merely customer service expectations—they form part of the airline’s regulatory compliance responsibilities.
Transparency in Airfares Is Receiving Greater Regulatory Attention
Another emerging area of enforcement concerns fare transparency.
The DGCA’s Air Transport Circular 01 of 2024[4] seeks to eliminate hidden pricing practices by requiring airlines to clearly disclose charges for ancillary services such as:
- baggage;
- meals;
- seat selection; and
- other optional services.
Passengers must positively opt into these services rather than being charged through pre-selected options.
For airlines and travel technology companies, transparent pricing has become an important compliance requirement as well as a consumer trust issue.
Accessibility Standards Continue to Expand
The regulatory framework also places significant emphasis on protecting passengers with disabilities and reduced mobility.
Airlines are expected to provide:
- priority boarding;
- trained personnel;
- wheelchair and aisle-chair assistance; and
- necessary support services without additional charges.
As aviation services increasingly rely upon outsourced ground handling agencies, businesses should ensure that contractual arrangements and operational training remain aligned with regulatory expectations.
Licensing and Compliance Are Becoming Closely Interconnected
Although passenger rights are largely addressed through the Civil Aviation Requirements, the broader licensing framework under the Bharatiya Vayuyan Adhiniyam reinforces compliance.
Non-scheduled operators must satisfy continuing obligations relating to:
- corporate governance;
- safety management;
- security clearances;
- insurance requirements;
- operational capability; and
- periodic regulatory renewals.
Persistent regulatory non-compliance can potentially affect licensing itself, making passenger compliance an important component of overall business governance.
DGCA is demonstrating greater Enforcement
Recent enforcement trends indicate that the DGCA is increasingly willing to impose financial penalties where passenger obligations are not fulfilled.
One notable example involved enforcement proceedings against Akasa Air[5], where the DGCA imposed a monetary penalty after determining that compensation had not been paid following denied boarding caused by aircraft operational issues.
The significance of the case lies not merely in the penalty imposed but in the regulator’s proactive surveillance, demonstrating that enforcement is no longer dependent solely upon passenger complaints.
For aviation businesses, this highlights the importance of maintaining accurate compliance records and internal monitoring systems.
Businesses Should Not Overlook the Litigation Risk
Regulatory action represents only one aspect of passenger disputes.
Passengers may also pursue claims before Consumer Commissions under the Consumer Protection Act, 2019, seeking compensation for financial loss, inconvenience and deficiency of service.
Consequently, a single operational failure may expose businesses to:
- regulatory investigations;
- monetary penalties;
- consumer litigation;
- adverse publicity; and
- reputational harm.
A coordinated legal and compliance strategy therefore becomes essential.
Key Takeaways for Aviation Businesses
The Bharatiya Vayuyan Adhiniyam, 2024 signals a broader regulatory philosophy: stronger passenger protection through greater accountability.
Airlines, airport operators, charter operators, aviation service providers and travel businesses should proactively review their compliance frameworks by:
- auditing passenger rights policies against the latest CAR requirements;
- strengthening grievance redressal mechanisms;
- reviewing refund and compensation processes;
- ensuring transparency in fare disclosures;
- training operational and customer-facing personnel; and
- conducting periodic legal compliance reviews to minimise regulatory exposure.
Conclusion
India’s passenger rights framework has evolved into one of the more structured regulatory systems in the region. However, as recent enforcement actions indicate, compliance is no longer measured merely by the existence of internal policies but by their consistent implementation.
For aviation businesses, passenger rights should not be viewed as a standalone legal obligation but as an integral component of regulatory governance, operational excellence and customer confidence. Organisations that invest in robust compliance systems today will be better positioned to manage regulatory scrutiny, reduce litigation risk and strengthen their reputation in an increasingly competitive aviation market.
How We Can Help
Our Aviation and Regulatory Practice advises airlines, airport operators, charter service providers, aviation technology companies, travel platforms and other stakeholders on aviation regulatory compliance, DGCA investigations, passenger rights disputes, consumer litigation, licensing, contractual risk management and aviation sector advisory. We assist clients in developing practical compliance strategies that reduce legal exposure while supporting efficient business operations.
Author: Akhand Chauhan, Partner, and Shyamli Shukla, Senior Associate
Co- Author: Anushka sethi, Intern
- https://prsindia.org/billtrack/the-bharatiya-vayuyan-vidheyak-2024
- https://www.dgca.gov.in/digigov-portal/?baseLocale=hi?dynamicPage=dynamicPdf/iF%2FlBZytqR3ArkATtr1K2A%3D%3D&mainnull
- https://www.dgca.gov.in/digigov-portal/?baseLocale=hi?dynamicPage=dynamicPdf/L%2BpmGLLQXYOtnqsymf9V0Q%3D%3D&mainnull
- https://www.dgca.gov.in/digigov-portal/Upload?flag=iframeAttachView&attachId=Y0vycdDc4cx1sLlpAM8B6Q%3D%3D
- https://timesofindia.indiatimes.com/business/india-business/dgca-fines-akasa-rs-10-lakh-for-not-compensating-flyers-who-were-denied-boarding/articleshow/116630772.cms
