Three domestic airlines in Kingfisher Airlines, SpiceJet and IndiGo have tied up to take on the OTA Bandwagon. In a bid to get rid of the agents commission and service charges the three have come together to launch an online travel portal called Rang7. Rang7 is managed by a separate entity known as ShiVik Internet Private Limited.
Air India, Jet Airways and Kingfisher Airlines have earlier once withdrawn agent commission but had to soon restore as they were under pressure from thousands of travel agents across the country. Rang7 is currently also showing results from Jet and Kingfisher which means that there is a possibility that they too are part of this concentrated effort to beat the OTA. They have also launched a community MyIndia along with the site which gives information on India and its various facets like Destinations, Festivals, Monuments & Temples, or National Parks.
Will Rang7 Be A Major Threat To OTA’s?
In the short term its not a threat as online booking would require brand building which has already been built by the likes of cleartrip, yatra, makemytrip and ixigo. But in the long run Rang7 can be effective if marketed smartly.
Best Marketing Technique For Rang7?
I feel the best marketing tactic for Rang7 would be the backside boarding passes or in flight advertising. Nothing like suggesting current flyers about an option of booking tickets at a cheaper rate (given that rang7 wont have agency commission). This if done in a smart manner can take away market share in today’s recessionary times.
How are OTA’s Faring In These Times?
Though the number of passengers are falling the OTA’s seem to booking profits for the quarter ended March 09. If this article is to be believed then Makemytrip has made net profit of Rs. 1.5 crore for the last quarter and cleartrip has made small profit after tax deduction. Yatra has also claimed to have gained net profit as well as TravelGuru which seems to be continuing making profits in April.
Brighter Days Ahead For Online Travel?
Online travel revenues are expected to reach $5.7 billion (Rs28,386 crore) by 2010 and this move by Airlines to launch their own travel portal in Rang7 is a way to snatch a small piece of that pie from the existing OTA’s. While existing OTA’s would not believe a model like Rang7 can work it would be too early to write off their model. As I said if they market it well then there is surely scope to corner market share away from existing brands.
