It is quite common for the people to cancel the flight booking in case there is a change of plan of travel. Cancellations are a part of travel business and it is customary to either refund the whole amounts to the customers or to deduct some charge and refund the rest. How much of the amount will be refunded is dependent on the policy of the airline and is related to the time before the flight booking when the cancellation is done. The element of time is introduced because the airline would like to refund lesser amounts in case there is delay in cancellation since it loses the opportunity to offer the seat for reservation to others.
Since it is dependent on the carriers on what amounts will they charge towards cancellations, carriers determine the same on the basis of a number of factors. In the current aviation scenario when the air traffic is on decline in India, a number of carriers have reduced their weekly flights this year. At the same time, the carriers are seeking to reduce their losses by discouraging the people from cancelling the flights. This is sought to be done by increasing the charges of cancelling the flights as well as by making the cheap air tickets non-refundable. Lowest air fare tickets are not refunded because these are already lowly priced. A recent move has been by the Jet Airways which has made the lowest air fare slab non-refundable and increase the cancellation charges to Rs 2000 for the next higher slab.
While the carriers are within their right to make the cancellation policy which suits their intended purpose well, it might have adverse fall out since the passengers would now have to think twice about their plans before flight booking and if there is any doubt, then they might opt to go with the carrier which does not charge or charges a much lesser sum towards cancellation. Carriers also weigh the option of not allowing refunds for cheap air tickets seriously so that too many passengers do not take to other carriers due to strict cancellation rules.