India: Online travel firms see 40% demand revival in flight bookings

Photo: Reuters

Online travel aggregators (OTA) are seeing a 30-40% revival in demand, with only a few firms booking over 5,000 air tickets on a daily basis, as domestic flights try to resume operations in a staggered manner after a two-month break.

However, a sizeable chunk of these flight bookings are also getting cancelled by airline operators, affecting revenues of OTAs. The government had imposed a nationwide lockdown starting 25 March, which was extended til May. Operations of all domestic and international flights were temporarily suspended during this period, causing much distress to online travel firms who make a large chunk of their sales from airline ticketing. Domestic flights resumed from 25 May.

OTAs are now betting on reopening of domestic tourism and intrastate leisure travel to increase sales on their platforms.

Nishant Pitti, chief executive office (CEO) of EaseMyTrip, said the company witnessed a spike in flight cancellations initiated by customers when the lockdown was announced in March. These customers then rescheduled their flights to April hoping that travel norms would ease after the first phased of the lockdown that ended on 14 April.

Later, when the lockdown was extended, aviation regulator Directorate General of Civil Aviation (DGCA) issued a stern circular directing operators to not undertake bookings during the lockdown since air travel was banned. By mid-April, refund requests piled up and OTAs scrambled to process cash refunds to customers.

Airlines such as Indigo, GoAir operate with OTAs using a wallet model for bookings. OTAs deposit a chunk of cash in the airlines’ wallet, and they process air tickets on the basis of this outstanding balance with each operator.

“When we saw a sudden spike in cancellations, airlines refunded the money in the same wallet itself. But we can’t really provide refunds in credit to customers, hence, we started providing cash refunds directly to users, and our wallets balances with flight operator piled up to almost 120 crore in April,” added Pitti.

The article was first reported on Livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.