The impasse between MakeMyTrip.com and two airlines – Jet Airways and IndiGo – has been broken, with tickets from the two airlines now being made available again on the Online Travel Agent (OTA). A little over two weeks ago, Indigo and Jet Airways has pulled their inventory from MakeMyTrip over its opaque fare scheme; Indigo had pulled its entire inventory, while Jet Airways had limited ticket sales on MakeMyTrip to five tickets a day.
Following the announcement of the pullout, MakeMyTrip shares had fallen down as much as 19 percent, according to Fool.com. The share price did recover thereafter, but there hasn’t been a substantive impact of yesterdays announcement.
The Opaque Fares Controversy
Opaque fares involved travel portals selling customers highly discounted fares to online customers without disclosing the identity of the airline until the booking was done, essentially allowing airlines to offload unsold inventory. On March 28, DGCA directed all travel portals to withdraw this scheme, stating that the scheme violated the provisions of the 1937 Aircraft Rules and other circulars relating to transparency in display of air fares. Following this, MakeMyTrip reportedly dropped Kingfisher Airlines from this scheme and had claimed to have withdrawn the opaque fares scheme, but Indigo and Jet Airways claimed that MakeMyTrip had continued to sell opaque fares, at the time of pulling out.
What’s Wrong With Opaque Fares?
Frankly, I don’t see what’s wrong with having opaque fares – if there’s a customer who wants to pay the lowest possible price for inventory, and there’s an airline that is looking to offload its unsold inventory, why not allow them to do so? The issue, I guess, is with the opacity – that the name of the airline is not disclosed. A few months ago, when flights of Kingfisher Airlines were repeatedly being cancelled, customers were choosing other airlines, and it can be argued that if customers knew then which airline they were buying tickets for under the opaque fares scheme, they might not have bought the tickets.