It appears that the air ticket price war is back again. The year began with Spice Jet’s new year offer that offered 10 lakh low cost tickets for direct flights to any domestic destination booked between January 11 to 13, 2013 at Rs 2013.
Cleartrip, an online travel agent, has launched Pricewatch for international flights. It refunds money to the users when prices of international tickets the user has booked falls. For example, if someone books an international ticket at Rs 50,000 and if the best price for the route falls below Rs 50,000 anytime before the departure, Pricewatch will automatically reprice the tickets offering cheaper fare. It will also automatically refund the difference to ones account. Pricewatch kicks in once a user books an international ticket with Cleartrip.
Cleartrip states that Pricewatch will rebook the ticket and also send the new PNR code to the user, in case of a price drop. Essentially, Cleartrip cancels previous booking and books a new ticket for the user. It charges the user with an additional amendment fee. So the Pricewatch is only helpful if the difference in prices is greater than the amendment fee. Nevertheless it’s a smart move by Cleartrip.
Couple of days ago, MakeMyTrip, another online travel agent, launched a lowest airfare challenge where it offered users double the amount of difference in ticket if the user can prove that they can get a better price on international or domestic flight tickets elsewhere. While Cleartrip’s process is automatic but checks fares only from Cleartrip, MakeMyTrip offers a better discount. However, it should be noted that unlike that of Cleartrip where a user is entitled to the Pricewatch service until the departure, MakeMyTrip offers double the difference only if the user submits a screenshot of a better price at any other competitive OTA’s or airline’s own sites before 23:00 on the same day of booking the ticket. Users need to submit a form to avail a discount and MakeMyTrip gets to make a final call. In our opinion, MakeMyTrip’s method is not as transparent as that of Cleartrip.
Interestingly, while OTA’s are competing on price point on tickets, they are also significantly increasing the convenience fee for booking tickets through Online Travel Agents like Cleartrip, Yatra and MakeMyTrip. The reason behind this inordinate increase in convenience fees is that airlines have withdrawn a ‘pass through’ feature to save costs on payment processing. In case of credit card, debit card, net banking and cash card fees, charges levied by banks and cash card companies were earlier borne by the airlines, but they’re now being passed on to customers as a convenience fee. Airlines have also started charging a convenience fee for transactions on their website too.
Earlier this year, Cleartrip had launched paper-less tickets for flight, hotel and train bookings via Apple’s Passbook. Cleartrip Passes display important information about the traveler’s trip upfront with additional details on the reverse of the pass.
In November 2012, in an interview with MediaNama, Hrush Bhatt, Co-Founder, and Director, Product and Strategy, at Cleartrip mentioned that the company is fairly well capitalized so it’s not planning to raise funding in the near term. He also said if it does plan to raise money through an IPO in future then it plans to file one in the US. Note that MakeMyTrip filed for an IPO with NASDAQ in 2010.