online-ticket-industry

MakeMyTrip [MMYT] asserts its focus on growing its Hotels & Packages (H&P) business by spearheading online shift & mobile platform adoption. It is cementing leadership here. Robust air traffic driven by discounting of airfares surprised positively for MMYT’s Air business.

MakeMyTrip gained market share in domestic air ticketing business increasing it from about a steady 12% for the last several quarters to around 13%+ in Sep-14 quarter. To provide context, MMYT delivered a solid Sep-14 quarter with air ticketing revenues (less service cost) of US$18.4 million in revenues i.e., 20% Y/Y (and 10.7% Q/Q) revenue growth. Management suggests that revenue per booking is low primarily because of discounted ticket prices. But there is little correlation between revenue per transaction and air ticketing margins as margins in

MakeMyTrip (MMT) offers a comprehensive suite of travel and travel-related services and products. The company’s two primary lines of business are air ticketing and hotels & packages. Additionally, it provides rail and bus tickets, car hire, and ancillary travel services, e.g. travel insurance and visa processing.

Air Ticketing Business
The air ticketing business is primarily targeted at domestic travel within India and international travel to/from India. Over FY10-F13, MMT’s domestic air travel transactions have increased at 29% CAGR to 3.4m, whereas international travel transactions have risen at a 39% CAGR to 0.35m. MMT has real-time access to inventory of all major (full-service and LCC) domestic airlines