In a significant ruling that underscores the importance of honoring commercial agreements in the aviation sector, a Delhi commercial court has directed Akasa Air to pay ₹1.08 crore in damages to a Delhi-based travel agency after it abruptly cancelled confirmed bulk bookings for flights during the peak Christmas–New Year travel season of 2023–24.

The order, delivered by District Judge (Commercial) Lalit Kumar of the Saket Commercial Court on February 24, came after the court found that the airline breached a binding contract with ABS Tour & Travels, a travel agency based in Kalkaji, Delhi.

The dispute revolved around the cancellation of eight Passenger Name Records (PNRs) comprising 640 seats booked on the Delhi–Goa and Goa–Delhi routes.

Credits: The Pioneer

The Dispute Over Bulk Seat Bookings

According to court records, ABS Tour & Travels had purchased eight group PNRs from Akasa Air on April 11 and April 12, 2023. Each PNR consisted of 80 seats, taking the total booking to 640 seats for flights scheduled between December 23, 2023 and January 13, 2024.

These travel dates coincided with the Christmas and New Year holiday season, traditionally one of the busiest and most profitable periods for travel companies.

The agency paid ₹4.82 lakh as a 25% advance toward the total booking value, after which the airline generated the PNRs. According to the travel agency, the creation of these PNRs and acceptance of the advance payment effectively confirmed the bookings and established a contractual relationship.

However, the airline allegedly cancelled all eight PNRs on May 29, 2023, more than 45 days after the booking was made, without providing any prior notice or explanation.

Court Says PNR Confirmation Created A Binding Contract

The court observed that once the airline accepted part payment and generated the PNRs, a binding contract came into existence under the Indian Contract Act, 1872.

Judge Lalit Kumar noted that unilateral cancellation of confirmed bookings after accepting consideration constitutes a breach of contract, unless justified by specific contractual conditions.

“The plaintiff’s claim arises from cancellation of specific, confirmed PNRs after acceptance of part consideration during a peak seasonal window and is supported by documentary and circumstantial commercial evidence,” the court stated in its order.

The judge also emphasized that simply refunding the advance payment does not absolve the airline of liability for consequential damages caused by the breach.

Airline’s Defence Rejected

Akasa Air argued before the court that the travel agency’s claim for ₹1.08 crore was speculative and hypothetical. The airline pointed out that the agency had not sold any of the 640 seats and that the advance amount had already been refunded.

The airline also argued that airfares are dynamic and unpredictable, and therefore the claimed ticket price of around ₹17,000 per seat was not guaranteed.

However, the court rejected these arguments. It noted that the airline failed to produce any system logs, expert testimony, or backend records to demonstrate that the ticket price cited by the travel agency was unrealistic or improbable.

Additionally, the court held that the airline’s attempt to offer an alternative arrangement—reducing seats per PNR from 80 to 40 and offering new fares around ₹9,000—amounted to changing the original terms of the agreement, which the travel agency was not obligated to accept.

Impact On Travel Agency’s Business

ABS Tour & Travels argued that the sudden cancellation caused significant damage to its business operations and reputation.

The agency usually buys airline seats in bulk and sells them to brokers, corporations, and individual travelers under both business-to-business (B2B) and business-to-consumer (B2C) formats.

Because the reservations were made especially for a time when demand for Goa flights often spikes, the agency argued that the cancellations resulted in a loss of profit potential, consumer trust, and market reputation.

The court recognized that group reservations during holiday seasons are frequently made specifically to take advantage of anticipated increases in demand for travel.

Credits: Curly Tales

Legal Experts Say Ruling Strengthens Consumer Rights

The ruling, according to legal experts, sends a clear message to the aviation sector about upholding openness and respecting confirmed reservations.

The founder and managing partner of CLAP Juris, advocate Tushar Agarwal, stated that airlines must provide total clarity in their booking terms.

He pointed out that “hidden or uncommunicated requirements cannot later be used as a justification for cancelling confirmed seats.”

Himesh Thakur, associate partner at PSL Advocates & Solicitors, another legal expert, emphasized that travel firms rely significantly on these reservations for their earnings.

Rahul Jajoo, a lawyer, stressed that arbitrary cancellations might seriously undermine customer confidence because the aviation sector depends on integrity and trust.