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MakeMyTrip Offers Zero Cancellation Fee On Flights; Wallet


So the walletization of digital payments in India is underway: MakeMyTrip is has just announced the launch of a Zero Cancellation charge policy, which allows customers reimbursement of fares, with cancellation charges retained with MakeMyTrip as an e-gift voucher. This appears to be the launch of an online wallet system, thereby ensuring loyalty, and offer the potential for incremental revenues in case the coupon is not used: the customer who cancels will have to use MakeMyTrip to buy the next ticket, and the coupon is valid only for six months.

In a sense, this is also a marketing tactic, to draw in customers who otherwise use other online travel agents or directly use airline sites for bookings. The coupon is valid on domestic tickets, and cannot be clubbed with any other promotional offer on MakeMyTrip.com. Also note that if a ticket bought using a coupon is cancelled, then no refunds are made, and the customer will have to pay a higher fee in case the booking is rescheduled.

Calculation of Cancellation Charges

We’re not quite sure of how MakeMyTrip calculates the cancellation charges. We’re written to MakeMyTrip CEO Deep Kalra for more, but the table below (from data published by MakeMyTrip) gives you an idea of how much is reimbursed. We’ve calculated the percentage amounts.

Here’s what other OTAs and airline sites charge for cancellation:

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– Cleartrip: Apart from the cancellation charges levied by the airline (which varies from airline to airline), Cleartrip charges a cancellation fee of Rs 300 per passenger per sector.
– Yatra: For online cancellation, Yatra charges Rs. 250 per person per segment and for offline (over the phone), it charges Rs. 300. This is over and above the airlines’ own cancellation fee.
– Jet Airways: Jet charges Rs. 500 as cancellation charges for economy class tickets,.
– Indigo: IndiGo charges a fee of Rs. 950 per Customer per Sector for cancellations

Clearly, there is a difference in charges, so we wonder what the deal is. Any guesses?

  • http://www.facebook.com/people/Amit-Lakhotia/620579556 Amit Lakhotia

    Nikhil

    The model is very simple. Every OTA charges an additional cancellation fee over the airline cancellation fee. Eg – for an Indigo booking the airline cancellation penalty is Rs 950 and the OTA cancellation penalty is Rs 300, then the consumer ends up paying Rs 1250 for cancellation in case he had made the reservation on an OTA site

    For a LCC, there can be two type of fares – refundable fares for which the airline cancellation penalty was Rs750 till March end; and the non refundable fares for which there was refund of only a very small amount (PSF+UDF)

    For a GDS carrier, the airline cancellation penalty depends upon the class in which the seat is booked. There can be big variations here

    What MMT is doing here is that it is providing e-coupons in lieu of cancellation penalty (only refundable fares). This would encourage the customers to make their future bookings on MMT in lieu of those coupons.  

  • elepton

    If I remember correctly ezeego1 charges a flat cancellation fee of Rs 750 per pessenger per ticket regardless of the airline.

  • http://www.facebook.com/people/Muhammad-Tsani-A-Hakim/100000688660973 Muhammad Tsani A. Hakim

    For a GDS carrier, the airline cancellation penalty depends upon the
    class in which the seat is booked. There can be big variations here.
    4shared