Travel Platforms Stranded In The Fog Of War

Geopolitical tensions over the past year have increasingly become the new normal. From the Russia and Ukraine War to rising tensions closer home between India and Pakistan, and now the escalating confrontation involving the United States and Iran, global instability has remained elevated.

For the travel industry, which had only just begun recovering from the devastation of the pandemic, these conflicts have translated into a fresh cycle of disruptions.

Recent escalations have already triggered flight cancellations, suspended routes and fresh travel advisories across the Middle East, sending ripples through the global tourism and aviation ecosystem.

The sector had only begun witnessing a steady rebound in 2023 after the pandemic-induced collapse. International travel demand was gradually returning, airlines had started restoring capacity, and tour operators were seeing strong bookings for overseas destinations. But that fragile recovery has repeatedly been tested by wars, airspace closures and shifting travel advisories.

Airlines and travel companies have been among the hardest hit. Conflicts across regions have forced carriers to reroute flights to avoid conflict zones, increasing flying time and fuel consumption. In several cases, routes have been suspended entirely due to safety concerns.

These operational disruptions inevitably cascade through the broader travel ecosystem. Tour operators face cancellations and itinerary changes, while travellers deal with uncertainty around previously popular international destinations.

For travellers, the impact is immediate. Many either postpone international trips or shift to destinations perceived as safer.

But the ripple effects extend well beyond airlines. Online travel agencies (OTAs), which depend heavily on international tourism flows, often see booking volatility during such periods. Industry executives say that even when conflicts are geographically distant, uncertainty tends to delay booking decisions and push travellers to reconsider overseas plans.

A Cascade Of Disruptions

The first major shock to the industry’s post-pandemic recovery came with the outbreak of the Russia–Ukraine war. The conflict forced airlines to avoid Russian and Ukrainian airspace, significantly altering flight paths between Asia and Europe.

For Indian carriers operating long-haul routes to Western destinations, this meant longer flying times, higher fuel consumption and rising operational costs.

More recently, the escalating tensions involving Iran, Israel and the United States have delivered the latest blow to the aviation ecosystem.

Airspace closures across parts of West Asia, one of the world’s busiest aviation corridors, have forced airlines globally to cancel or reroute hundreds of flights. In the immediate aftermath of the escalation, several Indian airlines including Air India, IndiGo and SpiceJet cancelled hundreds of flights to Middle Eastern destinations as safety concerns mounted.

Nearly 750 international flights operated by Indian carriers were cancelled within two days due to airspace restrictions across multiple West Asian countries.

For India, the region is not just a tourist destination. It also serves as the country’s primary aviation corridor connecting India with Africa, Central Asia and Europe.

With parts of this corridor disrupted, travellers have found themselves stranded in Europe and other destinations while airlines scramble to rework routes and schedules.

Investor Concerns Surface

Travel companies across the ecosystem are already beginning to feel the ripple effects.

Online travel platforms such as Yatra, Ixigo and EaseMyTrip have seen investor sentiment weaken amid concerns over travel disruptions.This comes at a time when several OTAs are already grappling with pressure on their balance sheets.

Between February 23 and early March, shares of Yatra declined by more than 24%, while EaseMyTrip fell nearly 14%. ixigo however, remained stable at ₹170.4.

MakeMyTrip reported a 73% year-on-year decline in net profit to $7.3 Mn in Q3 FY26, compared with $27.1 Mn in the year-ago period, largely due to a sharp rise in finance costs.

Similarly, EaseMyTrip saw its net profit plunge 90% year-on-year to ₹3.4 Cr, down from ₹34 Cr a year earlier.

Domestic Travel As A Cushion

Amid these challenges, domestic tourism has increasingly emerged as a cushion for travel companies.

Over the past few years, domestic travel in India has grown significantly, driven by post-pandemic travel enthusiasm and improved connectivity. Airlines have added more routes between smaller cities, while travel platforms have stepped up efforts to promote local destinations.

Domestic tourism offers clear advantages during times of global disruption. Travellers do not need visas, international travel advisories are less of a concern, and costs are generally lower compared with overseas trips.

As a result, when international travel sentiment weakens, domestic bookings often see an uptick.

Travel platforms have started adjusting their strategies accordingly. Many OTAs are expanding their inventory of domestic holiday packages and experiential travel offerings—from short weekend getaways to cultural and adventure trips.

However, domestic travel alone cannot fully offset the impact of disruptions in international tourism.

Outbound travel typically generates higher spending per traveller, benefiting airlines, tour operators and travel platforms alike. Corporate travel, international conferences and long-haul vacations remain key revenue drivers that domestic tourism cannot entirely replace.

Still, the experience of the past few years has highlighted the growing importance of resilience in the travel ecosystem.

As geopolitical tensions ebb and flow, travel companies are learning to operate in a world where disruptions are no longer rare shocks but recurring realities.

In such an environment, domestic tourism may not completely substitute international travel. But it could well serve as the safety net that helps the industry remain stable when global uncertainties intensify.

AI As The Next Strategic Lever

Alongside diversification into domestic travel, online travel platforms are also increasingly turning to AI to improve customer experience and operational efficiency.

For instance, MakeMyTrip has invested heavily in AI-driven customer engagement via its conversational assistant Myra. Built using large language models and proprietary travel data, Myra supports users across the travel journey, from trip inspiration and discovery to booking and post-sales support.

The tool now handles over 50,000 conversations daily, with more than 72% of interactions rated as high-quality. 

Similarly, Ixigo has been strengthening its supply-side ecosystem with AI-powered tools. The company recently launched HELLO, an AI-powered platform designed to help hotels manage listings, inventory and pricing more efficiently.

However, the growing reliance on AI driven customer support has also drawn criticism from users lately. For instance, across industries, users have complained on social media about delays in refunds/solutions and difficulties in reaching human customer service agents. 

With automated chat systems often being the first point of contact, many times time-sensitive issues are delayed. The lack of quick access to human support can add to frustration, highlighting the trade-off between operational efficiency and personalised customer service as travel platforms deepen their use of AI.

Fino Under Spotlight After CEO Arrest

Shares of Fino Payments Bank are drawing market attention after the arrest of its MD and CEO Rishi Gupta in connection with an alleged GST evasion case linked to online gaming platforms.

The development has triggered concerns around governance and regulatory scrutiny at the payments bank, even as the management has sought to reassure investors that its planned transition into a small finance bank remains on track. 

In the last five days, shares of the bank has slipped 12.7% to  ₹179.90

Notably, the lender had received in-principle approval from the Reserve Bank of India in December 2025 to convert into a small finance bank and has an 18-month window to complete the process.

Gupta was arrested by the Directorate General of GST Intelligence, which is probing an alleged syndicate that routed funds from illegal online gaming platforms through shell merchants and programme managers associated with the bank. Investigators estimate that nearly ₹3,000 Cr of transactions may have passed through such entities, with the potential GST implication pegged at around ₹840 Cr.

In response, the bank said the matter relates to programme managers rather than the bank itself and maintained that it has paid all GST dues on its revenues. It also clarified that real-money gaming merchants were blocked on its platform in August 2025 after the government disallowed such activities.

Following the arrest, the board has appointed CFO Ketan Merchant to oversee day-to-day operations while a committee of senior executives supervises business continuity. The management said liquidity remains stable, with customer balances around ₹2,250 Cr and the bank continuing to add about 10,000 CASA accounts daily.

This comes as the bank’s customer-initiated UPI transactions have dropped sharply in recent months, with volumes falling by more than half between November 2025 and January 2026.

The case has also drawn political attention, with finance minister Nirmala Sitharaman saying the government will review the matter. For investors, the key watchpoints now remain regulatory developments and whether the controversy affects the bank’s small finance bank transition plans. 

MARKETS WATCH: NEW ISSUES, POST-IPO JOURNEY & MORE

• Jio Financial Pumps ₹147.5 Cr Into Allianz Reinsurance: Jio Financial Services has infused ₹147.5 Cr into its reinsurance joint venture, Allianz Jio Reinsurance Limited, by subscribing to 14.75 Cr equity shares to support its operations. The venture, set up with Allianz, takes Jio Financial’s total investment in the JV to ₹150 Cr so far.
• Fractal Q3 Profit Rises 9% To ₹100 Cr: Fractal reported an 8.5% YoY rise in net profit to ₹100.1 Cr in Q3 FY26, while its operating revenue grew 21% to ₹854.4 Cr during the quarter, supported by strong demand in healthcare, life sciences and BFSI segments.
• Aye Finance Q3 Profit Jumps 87% To ₹43 Cr: Aye Finance reported an 87% YoY jump in its net profit to ₹42.6 Cr in Q3 FY26. Its operating revenue rose 23% YoY to ₹442.8 Cr. However, the company’s gross non-performing assets ratio edged up to 4.94% during the quarter.
• Tencent Sells ₹695 Cr Stake In PB Fintech: Tencent has sold shares worth about ₹695 Cr in PB Fintech, the parent of PolicyBazaar, through a block deal on the stock exchanges. Its affiliate Tencent Cloud Europe BV offloaded 48.40 Lakh shares at ₹1,435.10 apiece, reducing its stake in the company from 2.12% to 1.06%.

That’s all for this Sunday. See you next week with another edition of Inc42 Markets.

The post Travel Platforms Stranded In The Fog Of War appeared first on Inc42 Media.