Cleartrip sees 15% growth in business this year despite slowdown in air passenger traffic

Online travel company Cleartrip has seen little impact on its business this year despite the slowdown in the aviation industry in India.

Headquartered in Mumbai, the company which sees India market growing upwards of 20 percent, faced a difficult year, but still managed to clock about 10-15 percent growth, said company’s Senior Vice President, Balu Ramachandran.

Talking to Moneycontrol, he said, “This year the company rolled out a bunch of tech-enabled industry-first initiatives.”

Cleartrip launched Flexifly this year that lets travellers amend their travel schedule. Probably a step in the right direction as Ramachandran said that they saw more impulsive travellers on the platform this year as compared to the previous year.

“The last-minute bookings clocked a share of 42 percent this year. This is despite the fact that the year-on-year fare increase for last-minute bookings was higher in general than the overall increase in fares over last year,” he said.

The platform also launched Cleartrip for Work to let individual travellers access corporate fares. And this lets travellers from the MSME sector (micro, small and medium enterprise) get access to the corporate program that was only for the big firms.

MSMEs can now sign-in with their GST number to get corporate travel benefits on both domestic and international air travel as well as hotels.

“A lot of corporate travel is offline. If you look at the overall India market, there are about 30 million to 50 million SMEs (small and medium-sized enterprise) in India. There’s a huge base of MSMEs that did not have access to the corporate program,” he added.

In addition, the company has also partnered with PAYBACK to up customer engagement with a strategic loyalty program.

It is probably these efforts that are paying off for Cleartrip despite a slowdown in growth in air transactions this year.

Ramachandran said that “air transactions registered a growth of about 25 percent year-on-year last year, while the same was about 15 percent year-on-year this year so far.”

Air travel contributes to about 75-80 percent of Cleartrip’s revenue.

While the air travel sector has seen some major bumps this year because of a slowdown and the closure of Jet Airways, Ramachandran remains bullish about the Indian market.

He said, “Last year, from April to October, the net capacity addition for India's domestic travel was approximately 22 percent to 24 percent, and with that capacity, the passenger growth was about 18 percent. This year, the net capacity addition has been at four percent and the passenger growth has been around one to two percent. Hence, despite an airline going down there is growth.”

“This year, because the capacity addition was slow, we have seen seven percent to eight percent average increase in ticket sizes year-on-year, and if the ticket sizes had not gone up, the passenger growth would have been higher,” he added.

According to Ramachandran, India is the third largest market after the US and China so from mid-term standpoint, which is why he remains fairly bullish about the Indian market.

“If Air India’s plane goes off the grid it will mean overall capacity going down and if the capacity goes down there will be rise in prices,” he said.

However, “if Air India is divested successfully, I would expect the next year to have 15 percent growth in capacity. Otherwise the long-term business plans for other airlines is set in place. Indigo has plans to add about 20 percent to 25 percent capacity. So, next year, we bullish about prospects with the cloud on the horizon which is Air India and the uncertainty that is there, he added.