India’s online travel companies including MakeMyTrip, ixigo and Yatra are starting to feel the strain from slowing air travel demand as the war in West Asia, higher international airfares, and a weaker rupee hurt their air travel business in the March quarter. Aviation comprises 25-30% of revenue for these companies.
This is prompting a notable pivot in consumer behavior, with travelers increasingly shunning expensive Western routes in favor of more affordable domestic and Southeast Asian destinations.
The pressure follows seasonal weakness in aviation revenues over the previous two quarters. MakeMyTrip saw a sequential decline in air ticketing revenue in the December quarter, while both Yatra and ixigo reported softer aviation performance in the September quarter.
In March, Nasdaq-listed MakeMyTrip reported a more than 2% sequential decline in air ticketing revenue to $58.73 million from $60.07 million in the previous quarter. Revenue fell nearly 5% year-on-year.
“The decrease in revenue (year-on-year) in absolute terms from our air ticketing business was primarily due to a decrease in gross bookings (by 6.2%) primarily driven by a 1.8% decrease in the number of air ticketing flight segments and the depreciation of the Indian rupee against the dollar during the quarter,” the company said in a statement accompanying its results.
Gurugram-based ixigo, owned by Le Travenues Technology, saw revenue from air ticketing business fall nearly 6.5% sequentially to ₹95.7 crore in March quarter, against a 9% jump from the year-ago period. The company earned less from each booking, likely because of higher discounts, rising customer acquisition costs, and weakness in higher-margin international travel.
Ixigo and MakeMyTrip are yet to respond to a questionnaire from Mint.
“This was a difficult quarter in aviation for India and the world,” Aloke Bajpai, chairman and managing director of ixigo, said during the company’s earnings call on 21 May.
For Yatra Online, aviation business revenue fell about 1% sequentially to ₹60.6 crore in the March quarter, although it was over 5% higher than a year earlier. Chief executive Siddhartha Gupta said in the management commentary accompanying the results on 22 May, “Q4 was affected by geopolitical disruptions and war-related uncertainty, which weighed on international travel demand, particularly in MICE (meetings, incentives, conferences and exhibitions). Some corporate bookings were deferred or cancelled, though management expects a meaningful portion of this demand to return as conditions normalize.”
Travel pattern shifting
The pressure on international travel appears to have intensified from March. During MakeMyTrip’s post-results earnings call on 19 May, co-founder and group chief executive Rajesh Magow said travel demand for Western international destinations began weakening from March and has continued into the April-June quarter. Destinations west of India — including Europe and parts of West Asia — have been hurt by geopolitical tensions and higher costs, pushing travellers towards eastbound destinations and domestic trips.
Magow explained that since the beginning of May, shifting travel patterns have become evident. He noted that as "seasonality" takes effect, travelers who identify a problem with a specific destination make rapid adjustments, switching their plans to alternative locations instead.
Travel companies said destinations such as Thailand, Malaysia, Singapore, Bali, Colombo and the Philippines are seeing stronger demand as travellers look for cheaper, shorter and smoother vacations. Cleartrip said bookings to the Philippines have tripled this summer.
One key reason for this shift is the sharp rise in airfares to Europe. Data sourced from Cleartrip and reviewed by Mint showed fares on European routes rose between 47% and 60% year-on-year in May. A Delhi-London return ticket now costs around ₹1.15 lakh, compared with ₹72,000 a year ago.
Gagan Dixit, senior vice president, aviation, oil and gas, Elara Capital, said, “There are two factors playing out here. Weakening rupee to the dollar and euro means European destinations are substantially costlier. So people will look at alternatives within Asia where the rupee softening does not have much effect. Secondly, even in domestic routes, there is lower supply of aircraft, which has made air ticket prices elevated by 15% apart from factors like fuel.”
Supply crunch hikes fares
Airfares have climbed as a result of a growing supply-demand gap: while European carriers have added more flights to India, Gulf airlines and domestic players like Air India have significantly scaled back their services.
According to data from UK aviation analytics firm OAG, airlines such as British Airways, KLM, Virgin Atlantic, Lufthansa and Air France have increased frequencies by 7% to 2,491 departures during the April-June summer period. The Gulf carriers, which provide one-stop connectivity to Europe, have cut flights during the same period. Emirates, Etihad Airways, Qatar Airways and Oman Air have reduced frequencies by 6% to 6,541 departures, limiting options through Middle Eastern hubs amid regional disruptions. Air India has announced cuts to some Europe flights from June as part of broader operational adjustments.
Rikant Pittie, chief executive and co-founder of EaseMyTrip, said, “Global aviation networks are currently undergoing operational recalibration driven by route economics, fuel costs, airspace considerations, and fleet deployment strategies. Foreign carriers, particularly European and Asian airlines, are leveraging broader international networks and hub connectivity to strengthen India-bound operations and cater to sustained outbound demand.”
Meanwhile, domestic tourism is seeing demand improve. Airfares on popular routes, including domestic sectors, are already “substantially up”, ixigo's Bajpai said during the investor call. This could lead to some shifts to train and bus travel, he added.