Tuesday, May 19, 2009

Rang7 - the Opodo and Orbitz launch model comes to India or is it a fake marketing trick

One of the disadvantages of being a blogger is that I do not have the time to call around to confirm a story. This is one where I would love to have the time to do some Kevin May style investigative work. But I am a working blogger so it is time to pass on a rumour that it interesting either way

Two versions of this story floating around.

Version 1 - Airlines are coming together in India to fight back against makemytrip, yatra, cleartrip and travelguru.

Intial report from Pluggd.in that Indian carriers Spicejet, IndiGo and Kingfisher were to combine with $3mm in funding to launch a full online travel agent (OTA) called Rang7. The source was a press release picked up on IndiaPRwire. I saw it on twitter via a RT from @santoshmaharshi. Was a great story because it immediately brought to mind more parallels between the emerging online travel market in India and the history of the industry's development in the US and Europe. It mirrored the launch of Orbitz in 1999 in the US (backed by American, Continental, Delta, Northwest and United) and Opodo's launch in 2000 in Europe (backed by Aer Lingus, Air France, Alitalia, Austrian Airlines, British Airways, Finnair, Iberia, KLM, Lufthansa and Amadeus). Orbtiz has since shed it's ties to the airlines (NYSE:OWW) and Amadeus has taken majority control of Opodo.

The Economic Times of India has picked up this version of the story.

Version 2 - Whole thing is a possible PR scam

Pluggd.in then did an update to the story and quote "industry sources" as saying that the the airlines have not participated and they can't get an independent verification of the business being owned by the airlines. The About Us section of their Rang7 site is not very helpful (or maybe it is) as the founders link points to a completely blank page.

If this version is true then an OTA has kicked off its business by misusing the names of three key suppliers - not a great launch strategy despite the buzz it might generate. That said, nothing has been heard directly from the founders (though they do have a blog other here).

My guess the airline JV spin is a fake (or has gotten ahead of the deals being signed). Anyone out there heard anything?

note - Orbitz disclosure in the form of my linkedin profile.
General disclaimer and disclosure


ram badrinathan said...

nothing except what is in the press. Rangde is founded by Ram Seethapali, the ex Cendant M&A guy. Great guy.

It will remain to be seen how one can build a value proposition on $ 2 air arbitrage and manage a diverse base of shareholders. Ofcourse assuming the story is true.

Tim Hughes said...

@Ram B. Know RamS well from the old Cendant days. Great to hear he is back in the online travel game.

Aloke Bajpai said...

Assuming the story is true, we will have some pretty interesting dynamics in airline-OTA negotiations going forward.

Tim - minor correction. Travelguru is now a meta-search powered by iXiGO.com :)


Tim Hughes said...

@Aloke - thanks for the update