Delhi Court Orders Akasa Air To Pay ₹1.08 Crore For Cancelling 640 Festive Season Tickets

District Judge (Commercial) Lalit Kumar at Saket courts held that the airline’s unilateral cancellation of confirmed group bookings, despite accepting 25% of the total fare as advance and generating passenger name records (PNRs), amounted to breach of contract under the Indian Contract Act, 1872.

The dispute arose from bookings made in April 2023 by ABS Tours & Travels for 640 seats on the Delhi–Goa and Goa–Delhi routes for travel between December 23, 2023 and January 13, 2024. The travel agent paid ₹4,82,640, representing 25% of the total fare, through the airline’s portal. PNRs were subsequently generated, confirming the bookings.

However, in May 2023, more than a month later, the airline cancelled the bookings. The advance amount was refunded only in August 2023.

Akasa Air argued that group bookings exceeding 70 seats required a 50% advance payment and that the agent had failed to meet this condition. The court, however, found that the airline had not produced any document to show that such a requirement was communicated to the travel agent or was applicable at the time of booking.

The court held that once part payment was accepted and PNRs were issued, a binding contract came into existence. In the absence of any established contractual term permitting such cancellation, the airline’s action constituted breach.

Rejecting the airline’s contention that refunding the advance restored the parties to their original position, the court observed: “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.”

The travel agent claimed ₹1,08,80,000 towards loss of profits, arguing that the bookings were made to capitalize on predictable festive season demand. The airline contended that the claim was speculative, pointing out that no tickets had been sold from the cancelled inventory and that airfare pricing is dynamic.

The court examined screenshots submitted by the agent indicating ticket prices of around ₹17,000 per seat during the relevant festive period. Noting that the airline had not placed any contemporaneous fare data or system records to challenge these figures, the court held that loss of profit could be awarded where it is reasonably certain that such profit would have been earned in the ordinary course of business.

“The defendant’s wrongful cancellation deprived the plaintiff of a real and foreseeable commercial opportunity to earn profit during the peak festive season,” the court observed.

Akasa Air further argued that the travel agent ought to have mitigated its losses by accepting a revised offer made in June 2023, under which the number of seats per booking was reduced from 80 to 40 and fresh terms were introduced. The court rejected this submission, holding that the agent was not required to accept a significantly altered commercial arrangement to limit its losses.

While decreeing the suit for ₹1,08,80,000 towards loss of profits, the court declined to grant other reliefs sought. It refused to award interest at 18% per annum, citing the absence of any contractual provision or supporting material. The claim for damages for mental agony was also rejected, the court noting that the dispute arose out of a purely commercial transaction between business entities.