For the Indian travel tech industry, the year 2025 saw a pivotal shift, driven not by demand cycles or festive peaks, but by regulatory changes, airline disruptions, and safety shocks that kept listed online travel companies under pressure.
The headwinds do not seem to have slowed down the industry from a 7.1% annual growth rate, contributing INR 22 Lakh Cr to the GDP in 2025, but the instability certainly forced businesses to re-evaluate their tech stack.
Their services were no longer judged only on pricing or inventories and, instead, if they could handle flight cancellations, airspace closures, aircraft groundings, and regulatory audits. While diversification hedged the financials for some of the companies in the space, those depending on a single core business suffered.
As the year comes to a close, Inc42 takes a look at the key developments that changed how travel tech companies operate.
The biggest regulatory development of the year was the DGCA’s proposed 48-hour look-in window for flight tickets, which would reportedly allow passengers to cancel or modify bookings without penalty if the ticket is booked at least five days before departure for domestic flights and 15 days for international travel.
While the rule is still at the draft stage, its operational implications were clear enough for online travel agencies (OTAs) to start rewiring systems well before any formal notification.
On a typical domestic ticket, cancellation penalties range from INR 2,000 to INR 3,500 per passenger per sector for full-service airlines, and can go up to INR 5,000 for some low-cost carriers, over and above non-refundable fare components.
Under the draft rules, that penalty income effectively disappears for early bookings. Airlines and OTAs would also be required to refund all non-consumed charges, including airport development fees, passenger service fees, and security levies, with no option to push customers into credit shells.
The refund timelines have also been made stricter – seven days for card payments, immediate for cash transactions, and an outer limit of 21 working days for bookings made through agents or OTAs, even though airlines remain responsible for initiating the refund.
Platforms that historically relied on airline-side delays, manual reconciliation or refund float suddenly face higher complaint volumes and regulatory exposure. The significance of this shift becomes clearer when seen alongside real disruption events from 2025.
After the June 2025 Air India crash, airlines reportedly saw a 15–20% reduction in bookings in the immediate aftermath.
Similarly, episodes such as the cancellation of over 300 IndiGo flights in a short span in December exposed how quickly refund queues, customer support loads and rebooking workflows could overwhelm the platforms.
Each additional day of float lost under tighter DGCA timelines changes the cash-flow maths for both airlines and intermediaries.
This is happening at a time when the airline balance sheets are already strained. The prolonged closure of Pakistani airspace is estimated to cost Indian airlines around $800 Mn annually through longer routes and disrupted schedules, with IndiGo alone facing a roughly INR 1,300-Cr impact. For its bigger peer Air India, with a far larger international fleet, the setback is pegged at $600 Mn, per Reuters.
While flying into such a rough patch, the mandatory faster refunds and the loss of penalty revenue further reduced the flexibility for the airlines, building pressure on OTAs that interact directly with the customer.
No airline or OTA has yet quantified the financial impact of the proposed rules, but people close to the matter told Inc42 that it could be a turning point for the industry with warnings of shrinking refund float and expanding automation spend, particularly for players running on legacy systems.
Consumer-facing OTAs like MakeMyTrip have largely welcomed the proposal in public, positioning faster refunds and 48-hour free cancellation as a trust lever to win customers.
Operation Sindoor, launched by India against Pakistan in May 2025, became one of the most disruptive geopolitical flashpoints for civil aviation and travel industries in recent years.
The operation involved coordinated missile and air strikes on nine terror sites in Pakistan and Pakistan-occupied Kashmir, triggering an immediate security response that spilled into the commercial airspace. Pakistan first imposed partial restrictions over key cities like Islamabad and Lahore before fully closing down its airspace to all traffic from May, initially for 48 hours, and then was repeatedly extended amid escalating tensions, including reported drone attacks, eventually barring Indian carriers for months.
On its part, India issued a series of NOTAMs shutting 32 northern and western airports, including Srinagar, Jammu, Amritsar, Chandigarh, Leh and Jodhpur, to civilian operations until May 15.
The combined measures led to widespread flight diversions and over 430 cancellations by Indian carriers such as IndiGo and Air India in a typically peak travel period. For the travel sector, the disruption went far beyond a short-term shock.
Northern India saw 70–90% booking cancellations, while travel platforms were flooded with refunds and rescheduling requests, and hotels and tour operators reported a 40–50% erosion in revenues for May.
The shutting of Pakistani airspace forced airlines and travel-tech platforms to reroute Middle East and Europe-bound flights, increasing fuel burn by 20-30% reportedly, reducing operational efficiency. Even after the immediate military phase ended, recovery remained slow, with startups pivoting demand towards southern and domestic leisure routes as advisories, airspace uncertainty and traveller caution continued to weigh on bookings.
EaseMyTrip remained under sustained pressure throughout 2025 as its financial performance weakened quarter after quarter, largely due to aggressive acquisitions and external factors. It was hit hardest because the majority of its revenue comes from airline ticketing.
The company entered FY26 with a sharp slowdown in its core business, which still accounted for roughly 50-60% of its revenue. In Q1 of FY26, the company’s operating revenue fell 25.5% on-year to INR 114 Cr, with air-ticketing revenue slumping nearly 50%.
EaseMyTrip’s profitability collapsed, with the bottomline caving in 98.7% to just INR 0.44 Cr, largely because costs spiked even as revenues shrank. Its total expenses exceeded revenues, and unit costs crossed one rupee for every rupee earned, throwing up an uncomfortable signal for a price-sensitive OTA model.
The pressure intensified in Q2 of FY26. Its revenue declined again by 19% on-year and 18% sequentially to INR 118 Cr, while expenses soared. Higher employee costs, aggressive customer acquisition spends and the lingering impact of INR 370 Cr spent on acquisitions pushed the company into a loss of INR 36 Cr, compared to a profit in the same quarter last year.
By the end of the first half of FY26, EaseMyTrip’s revenue dipped 22%. These operating challenges coincided with a leadership shake-up. In August 2025, cofounder and managing director Prashant Pitti resigned, triggering fresh scrutiny around governance, capital allocation and strategic direction. His brother Nishant stepped down as CEO in January.
EaseMyTrip’s troubles fuelled sentiment across listed travel tech firms, prompting investors to look more closely at revenue quality, exposure to refunds and cancellations, and the extent to which OTAs were dependent on airlines for growth.
Flight-heavy platforms were increasingly seen as vulnerable to both regulation and operational shocks, particularly when the margins were thin.
Their diversified peers, however, offered a counterpoint. Travel aggregator ixigo’s stronger performance through the same period underlined the value of having meaningful exposure to rail and bus bookings.
With trains contributing over 40% of its revenue and buses nearly a quarter, ixigo was better insulated from the aviation slowdown. While it was not immune to rising costs, its ability to grow revenue sharply in H1 of FY26 reinforced the view that multi-modal platforms are structurally more resilient than pure or flight-dominant OTAs.
The year 2025 made one thing clear in India’s online travel tech market: business mix mattered more than scale in air-ticketing.
Companies that had spent years building meaningful hotel, train and bus businesses were far better placed to absorb shocks in aviation, while flight-heavy players struggled to protect revenue growth and margins.
MakeMyTrip and ixigo entered 2025 with structurally different models from EaseMyTrip. While all three sell air tickets, MakeMyTrip and ixigo increasingly treated flights as just one part of a broader travel stack. The distinction became critical as air-ticketing turned into the weakest-performing segment of the year due to fare caps, intense discounting, regulatory changes and repeated airspace disruptions.
MakeMyTrip shows how diversification translated into resilience. In Q3 of FY25, the company grew its revenue by 25% on-year, even though air-ticketing margins remained under pressure.
Growth was spread across segments – hotels and holiday packages rose nearly 25%, bus-ticketing grew over 31%, and air still expanded around 20%. This balance ensured that softness in any single category did not derail its overall performance.
Higher-margin hotel and package bookings continued to subsidise the lower-margin flight business, helping the company protect profitability despite competitive pricing.
The trajectory of ixigo was even more revealing. The company’s core strength remains rail-ticketing, a segment that offers high volumes, repeat usage and relatively stable economics. In FY25, ixigo’s total revenue rose 40% to INR 914 Cr, driven by strong growth across verticals.
Train GTV grew in high double digits, but the standout performance came from buses and flights, which saw sharp expansion off a smaller base. Bus bookings surged well over 60% on-year, while flight GTV growth crossed 70% in Q3.
The comparison between diversified and not-so–diversified travel tech companies appears sharper in the way they navigated the margin pressure. Diversified OTAs could afford to prioritise volume and user acquisition in flights because profits were being generated elsewhere.
EaseMyTrip, with limited cushioning from non-air segments, had far less room to manoeuvre. Even though the company has been pushing hotels and holiday packages, these verticals are yet to reach a scale where they can materially offset the weakness in flights.
Yatra’s FY25 performance reinforces the same lesson from a slightly different angle. After several difficult years, Yatra posted a sharp recovery, with its revenue shooting up 90% year-on-year and profits surging over nine-fold. This rebound was driven not by retail air-ticketing, but by a renewed focus on corporate travel, MICE and enterprise clients following its acquisition-led expansion.
For ixigo and MakeMyTrip, buses delivered consistent double-digit growth and higher engagement from repeat users. Rail ticketing, especially through OTAs, gained further legitimacy as IRCTC’s policies increasingly favoured genuine users over agents and bots. For platforms like ixigo, which have built deep product capabilities around trains, this translated into sustained volume growth without the volatility seen in aviation.
The new year is likely to see the Indian travel tech sector standing at a difficult terrain with soaring demand on one hand and shrinking margin on the other. With the prospects of geopolitical stability appearing foggy, and financial uncertainty showing no signs of relent, it remains to be seen how the travel tech companies recast their business to create multiple revenue streams.