As a 16 year old, Rikant, who was pursuing engineering, often saw his father, a coal trader, jet-setting across the country and overseas. But the trips came with an expensive tab as the youngest of the three Pitti brothers — Nishant and Prashant — found out that the agent was overcharging — 1.5K more than the regular fare. Curiosity got the better of Rikant, who began booking tickets for his father from other agents. Soon, tickets were being booked for those in his father’s social circle and relatives. Rikant and Nishant got together, and were later joined by Prashant, to set up a small travel agency in 2005. “We were non-IATA agents and it was a part-time business,” says Rikant. In 2008, on securing their IATA licence that permitted them to directly deal with airlines, EaseMy Trip (EMT) took wings.
However, since it was still early days for India’s start-up ecosystem, finding investors was a tough ask, which was further accentuated by the global credit crisis. “Instead of pitching to investors, we felt that we would be better off focusing on the business,” says Rikant. In the early days, given the company’s B2B focus, the brothers spent their time resolving the problems of travel agents and building the tech. The arrival of Air Deccan gave wings to their business. But after the initial days of cheap pricing, when normalcy returned, the brothers had to rope in more agents to keep their business from floundering. Year 2011 marked the shift to wooing flyers directly — albeit with a difference — EMT chose not to play the discounting game and, instead, stuck to its transparency quotient. “Customers were made to believe that they can get the lowest fares with discount coupons. But on the final payment page, they are charged convenience fees which exceed the discount. We came up with a clear strategy of no convenience fees and no hidden costs, which helped us win customers’ trust,” says Rikant. As a result, 86% of EMT’s customers stayed on.
But what separates the country’s No. 2 online ticketing major is that it is the only profitable online travel agent. While market leader Gurugram-based MakeMyTrip (MMT) reported a 68% drop in revenue to $163 million in FY21 and a loss of $56 million, EMT continued to stay profitable despite a fall in revenue. Even as the topline more than halved to ₹210 crore in the pandemic-hit FY21, it reported a profit of ₹61 crore with a high operating margin of 58%. In fact, profit has seen a near nine-fold rise from ₹6.6 crore in FY18, helping the company burnish its return ratios with return on equity doubling from 15% in FY18 to 37.5% in FY21. The momentum has continued in the current fiscal as well, with EMT posting an 84% jump in consolidated profit after tax to ₹40.42 crore in Q3 even as gross booking revenues surged 65% to ₹1,293 crore. While MMT had gone public early — in 2010 — on the Nasdaq, EMT bid its time and chose a domestic listing last year. It was a sensational debut as the company became a unicorn on listing — a rare feat for a start-up. Though the market cap has since fallen marginally, business is robust as ever. “We are profitable as we maintain a lean operation instead of burning cash. A lower employee base compared to our competitors, and solid technology stack have ensured high operational efficiency,” says Rikant.
With the online travel segment expected to double to $31 billion by FY25 on the back of increasing smartphones and Internet penetration, the runway for EMT is large as nearly 93% of its bookings come from individual travellers. It is now looking to bolster its non-air ticketing business with three recent acquisitions — B2B travel marketplace Traviate, mid-market hotel chain Spree Hotels & Real Estate and intercity mobility start-up YoloBus. With that, the Pitti brothers have packed their bags for a long haul. — V. Keshavdev