Delhi Court directs Akasa Air to pay Rs 1.08 crore to travel agent

A Delhi commercial court recently directed Akasa Air to pay Rs 1.08 crore to a travel agent for loss of profits after cancelling a group booking of 640 airline seats made in advance for the peak December–January festive season. District Judge (Commercial) Lalit Kumar at Saket courts held that the airline’s cancellation of eight confirmed group bookings, despite having received 25 per cent of the total fare as advance, amounted to breach of contract. “The loss claimed is the loss of opportunity arising from the cancellation of a confirmed group inventory during peak season. In commercial transactions, especially in the travel industry, group bookings for festive periods are made precisely to capitalize on predictable seasonal demand,” the Court observed. In the February 23 order, the Court directed payment of Rs 1,08,80,000 towards loss of profits, though it rejected other claims of damages for mental agony and interest.

The dispute arose from bookings made by ABS Tours & Travels in April 2023 for 640 seats on Delhi-Goa and Goa-Delhi routes for travel during the peak festive period between December 23, 2023, and January 13, 2024. The travel agent had paid Rs 4,82,640, which made up 25 per cent of the fare, through the airline’s portal, following which passenger name records (PNRs) were generated. More than a month later, in May 2023, the airline cancelled the bookings. The advance amount was refunded nearly three months later, in August 2023.

In its defense, the airline argued that the bookings were cancelled because group bookings of more than 70 seats required a 50 per cent advance payment, and the travel agent had not met this condition.

However, the Court noted that the airline failed to produce any document to show that such a requirement was communicated to the agent or was applicable at the time of booking. The Court further held that once the airline accepted part payment and generated the PNRs, a binding contract had been made under the Indian Contract Act, 1872.

“Refund of principal does not extinguish the claim for consequential damages flowing from breach... The refund merely neutralized the advance; it did not compensate for the lost commercial advantage,” stated the Court.