Spicejet, IndiGo and Kingfisher partner to launch their online travel agency, Rang7

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Spicejet, IndiGo and Kingfisher have partnered to launch their own OTA (online travel agency), Rang7 (will go live by May 3rd week).

Teaming up will help them reduce agency cost (Indian carriers spend close to Rs. 200 Crore in distribution cost, given away to travel agents and travel portals such as Makemytrip, Yatra and Cleartrip.com.)

This partnership will help them reduce the distribution cost significantly (it will be co-marketed by the three companies).

Unlike existing portals (i.e. MMT/Cleartrip/Yatra etc), which show fares in the order of commissions they receive, Rang7 will show unbiased fares for all different airlines (the portal has raised an investment of approximately $3 Million) and participating airlines would end up owning an equity stake in the portal.(source)

Now this is damn interesting  (it’s on the lines of Orbitz) and at the same time, questionable whether this strategy is sustainable or not (what about expense in marketing/distribution/call center etc?).

Update: There seems to be a confusion regarding the validity of this entity. Could be a cheap marketing tactic. – here are the details

Read Interview with iXiGo founder on their business model/strategy.

What’s your opinion?

Also see: iXiGo acquired Tripmela

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