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Airlines To Back Online Flight Booking Site Rang7, Travel Portal MyIndia

(By Nikhil Pahwa and Preethi J) Under the aegis of Federation of Indian Airlines, three airlines - Spicejet, IndiGo and Kingfisher - are going to back a site for booking airline tickets and planning holidays called Rang7. Rang7 and its travel subsite MyIndia directly compete with online travel agents (OTAs) Cleartrip, Yatra and Makemytrip. Update: MyIndia has been launched. By the looks of it, Rang7 has been in the works for over a year, and is operated by ShiVik Internet Pvt Ltd according to its site. As per the press release, a venture capital firm has apparently committed $3 million to Rang 7, though the release doesn't mention which. Last year, Air India, Kingfisher and Jet Airways had stopped paying the 5% commission to travel agents and decided they would let users book tickets directly from their websites. It failed then due to pressure from the OTA community and a compromise was reached. The carriers now have recession on their side and can use it as an opportunity to draw users with zero commission as bait. How Will They Make Money? It is suggested that Rang7 has been launched by the Airlines to counter the issue of paying out around Rs. 200 crores in distribution costs, in the form of commissions to ticketing agents. If Rang7 does not charge a commission, then how will they make money? How will they fund the cost of operations? The other options for them are to receive money from the marketing budget of airlines, and compete…

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