Monday, May 04, 2020

EaseMyTrip faces cash flow issues as forward bookings drop, refunds continue

Travel agency EaseMyTrip is facing cash crunch issue as the ban on passenger flights in the wake of coronavirus crisis has dried up its cash flow.

Nishant Pitti, the company’s CEO, said it is facing near-term cash flow concerns because cancellation refunds are being made from its own funds and the airlines are releasing refunds only to the travel agency wallet.

Prior to lockdown too, the travel agency would issue refunds to the passengers from its own funds and issued new tickets using the amount credited back by the airline to the travel agency wallet.

Hence, there was a regular cycle of refunds and ticket issuance. But, the travel ban has resulted in an imbalance in ticket bookings and refund issue.

EaseMyTrip has requested airlines to issue refunds to its bank account for a temporary period.

The civil aviation ministry and Directorate General of Civil Aviation have mandated that passengers who had made bookings between March 25 and April 14 for a travel between April 15 and May 3 are eligible for full refund.
As a result, travel agencies and airlines face a situation where the number of cancellations are high but the rate of forward bookings is low. EaseMyTrip estimates the refund amount eligible for flights scheduled between April 15 and May 3 would be nearly Rs 180 crore.

"We are currently issuing cancellation refunds to passengers within 3-4 days of request made. More than 90% of domestic flight bookings are made via travel agents and websites. The tickets are pre-booked and pre-funded by the travel agent," Pitti said.
04/05/20 Anu Sharma/CNBC TV18
To Read the News in full at Source, Click the Headline


Post a Comment