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MakeMyTrip expects supply chain-related headwinds from the air travel segment to continue for Q4FY24 and is hopeful that they will ease out in the next financial year. However, despite a short-term crunch on domestic air travel, the company has seen tremendous growth from the international air travel segment. It has, meanwhile, also scaled its hotel offerings and expects momentum from that segment as well.
The Nasdaq-listed OTA posted its Q3FY24 results earlier this week. During the post-earnings call, Rajesh Magow, Group Chief Executive Officer of MakeMyTrip said, “During the last quarter, I talked about near-term supply challenges, particularly in the domestic market.”
Indian airlines have been facing a supply chain crunch due to the insolvency of GoFirst and the grounding of airplanes due to Pratt & Whitney engine issues. However, the carriers are taking various steps including the addition of a large number of planes in the coming years to fill this supply gap.
Most additions
As per estimates, collectively airlines are expected to add about 150 planes during next year which will be the highest number of additions in a single year. “In light of this, we are hopeful that the supply situation will start improving from the next financial year,” Magow said.
MakeMyTrip posted a net profit of $24.2 million in Q3 FY24 compared to the corresponding quarter last year, when the online travel aggregator reported a net profit of $0.2 million, in the light of a “seasonally strong quarter” the company said in a regulatory filing on Tuesday.
“Despite the short-term headwinds, our growth on a flown basis at 7.2 per cent q-o-q outpaced the market growth of 6 per cent, allowing us to consolidate our market share at 30 per cent+ levels in the domestic air market,” Magow added.
International business
“As for our international air ticketing business, we have not only fully recovered but have started to grow above the pre-pandemic peak,” he said.
Air travel is the largest contributor to the company’s bookings and revenues. It is also the largest player in this segment across Indian OTAs. However, while the company faced slight headwinds in this segment, it covered gaps with the hotels segment.
He explained that the international outbound business for the company “continues to scale well.” He said that this was due the the addition of the new direct flights to various destinations like Tashkent, Baku, and Bali and key international holiday destinations like Thailand, Sri Lanka, and Malaysia having announced waiver of visas for Indian travellers during the quarter. “This is likely to fuel greater demand for these international destinations in the times to come,” he said.
eVisa for UAE
In order to tap this, the company is planning to expand its eVisa offerings for the UAE. The company’s accommodation business which includes hotels, homestays, and packages, witnessed “strong y-o-y and q-o-q growth in the seasonally strong quarter.”
During the quarter, MakeMyTrip touched its “highest ever single night check-ins of close to about 200 thousand people on the back of strong holiday demand.” According to its earnings presentation, the company sold over 63,000 domestic hotels across 1760 cities.
The company was able to also command a better margin for this segment, it said during its earnings call. It will continue to add more properties to its platform, the company added.
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