Having struck an uneasy balance between its revenues and losses on a Y-o-Y basis, online travel aggregator Cleartrip recently acquired Saudi Arabia-based OTA Flyin with a view to deepening its presence and cash in on the huge air traffic markets in India and the Middle East And North Africa (MENA).
For the past couple of years, the Cleartrip’s India operations has, on one hand, succeeded in reducing its losses from $9.4 Mn (INR 64.6 Cr, FY 15-16) to $9.2 Mn (INR 63.35 Cr, FY 16-17) and, on the other, it has increased its revenues from $38.5 Mn (INR 265 Cr) to $39.7 Mn (INR 273 Cr) during the same time.
However, at a time when the online travel market in India (mainly flight and hotel aggregators) is expected to hit $13.6 Bn by 2021 and account for almost 43% of the total travel category, and its biggest Indian competitor, MakeMyTrip, has acquired leading travel aggregator Ibibo and grabbed the lion’s share of the market, slight improvements won’t save the day for Cleartrip.
From India To MENA: Going With The Flow
In hindsight, it seems like Cleartrip had a clear vision of the M&A developments it would be getting into eventually. Speaking to Inc42, Stuart Crighton, founder and CEO of Cleartrip, points out the difference in the design thinking of the company over the years,
“Having set up Cleartrip way back in 2006, after five-six years of operations in India, we realised the presence of the heavy air traffic corridor between India and the UAE and a significant number of visitors are recurring ones With a view to fulfilling the rising demand, we established our operations in the UAE.”
Crighton adds, “After setting up our operations in the UAE, we saw huge air traffic between the UAE and Saudi Arabia. Therefore, the acquisition of Flyin is part of the natural expansion process to fulfil our customers’ demands, rather than a shift in our market focus, as speculated by some of the media.”
What’s With The ‘Flyin’ Deal?
Founded in 2008, Flyin claims to be Saudi Arabia’s biggest OTA, providing customers direct access to over 320K hotels, over 450 airlines, and a wide network travel product and services.