Citizens' Issues
Public Interest Exclusive
All you need to know about Opaque Fares

It all started out with offering a name-your-price kind of scheme in India. Others like, Cleartrip and MakeMyTrip offered similar schemes to bargain hunters who did not care what airline they flew or the exact schedule. While you could potentially be saving money on these tickets, they are sure not worth the headache you’ll go through

The hunt for cheap flight tickets has been as old as the day when airlines moved to a dynamic pricing model and all seats on a flight stopped costing the same price. The guy sitting next to you on the flight could have paid a fraction of your ticket price.

The last couple of weeks have been a lot of conversation about "Opaque Fares". While most of us are not so confident of e-commerce in India yet, we are happy to go out there and book our air tickets via the multitude of travel portals, since it gives the power of booking in our hands as compared to the travel agents earlier.

Last year, in their bid to expand their product offerings, some sites went out to experiment with a new offering where you could buy an air ticket fitting certain parameters and you could get it for cheap as long as you were not fussy about the airline you were flying. Airlines were hand-in-glove because they would receive an upfront cash payment for a slice of their inventory, even though they had to sell cheap. Since you did not know the airline you were flying, the exact schedule of your flight before take reserving your ticket, this practice was termed as 'opaque' fares.

In the western world, this concept had taken off with Priceline and Hotwire quite a while back. Priceline accumulated all the last minute unsold inventory and gave it away to bargain hunters who did not care what airline they flew and the airlines would get some revenue for a seat which would have otherwise gone empty.

In the recent past, it all started out with an upstart site offering a name-your-price kind of scheme in India. You select your destinations, your timeslots and your price, and the site would tell you if you could buy a ticket at your price or not. You don't know the airline yet, nor the exact time of your flight, or other details like will you be flying direct or stopping at two stops on the way. Once you pay up, you'll get an email with your ticket and the exact details you need to know to board the plane.


They further took it forward with a pre-paid scheme where they went about selling Rs 2,500 vouchers to travel anywhere in India as long as the passengers were okay not to know the airline before they paid up. was followed by many a portals such as, Cleartrip and MakeMyTrip which offered similar schemes with anonymous airlines being sold to customers


While most players of the industry were happy to fill up those empty seats on their planes, industry leader Jet Airways called these promotions "scam fares" and refused to participate in these offers. It also asked the regulator to look into the matter and intervene to stop the practice.

Jet Airways has good reason to complain. Everytime we fly on a Rs3,000 ticket from Mumbai to Delhi, we are flying below cost of that seat on the plane. Thanks to government-backed market competition (called Air India); airfares in India have been depressed for a long while. Some airlines had finally taken the leap to hike up fares again to cut their losses after Kingfisher Airlines almost crippled to a halt. And these fares, if they became big, would just mean you go back to selling tickets at a lower price again.

Another theory, though not validated in the open, was that all the portals had paid upfront cash to buy Kingfisher Airlines seats in bulk, and now that the airline was in trouble, they wanted to sell out cheap and make the best of what they had. And hence, these special prices, under whatever name they went, were a way to sell you Kingfisher Airlines tickets which you normally wouldn't touch due to their recent issues.

Directorate General of Civil Aviation (DGCA), the aviation regulator in India, has also recently intervened in the "opaque fare" discussion, calling the practice of 'opaque fares' a violation of the regulations and issued an order to all airlines to withdraw from this practice immediately. 

As I write this, some major portals have pulled out their opaque fare offers while some others are still continuing with these promotions. While you could potentially be saving money to the extent of Rs1,000-Rs1,500 or so on these tickets, they are sure not worth the headache you'll go through in case you end up being on a flight which is not to your preferences. So, buy only being aware of all the risks!

AJ writes a travel and aviation focussed blog from India at You can follow him at @livefromalounge on Twitter.





A kumar

5 years ago has stopped issuing tickets against its coupons which were sold from Rs 2500/- onwards. The reason given is the order of the DGCA of 28th Mach which does not allow opaque bookings. This seems to be quite conveniennt to them as it is difficult to meet commitments of booking for users at Rs 2500. So much for convenience of orders of DGCA.
However it continues to offer "upto 40% discount" on last minute bookings ( which is actually 3 days in advance) where the carrier is not disclosed and the scheme is equally opaque. This has left the coupon holders aghast while the company is happy to continue with its ways of booking.
Havn't they mastered looking at the bright side of things?
Of the Rest of Offers on the site, Incidentally, their 1 for 1 free domestic offer is valid only on bookings on Kingfisher, when sites such as Yatra prclaim that they do not offer Kingfisher seats.( Nothing against Kingfisher). We live in interesting times and a wonderworld of regulations. Enjoy!



In Reply to A kumar 5 years ago

I've shot off a query to w.r.t. this discrepency. I assume the first offer of 2500 rs. etc was exclusive to Kingfisher and hence stopped. on the other offer they are still offering other carriers. Just a guess, till I hear from them.

A kumar

In Reply to AJ 5 years ago

The Rs 2500 Coupon offer was not exclusive to Kingfisher. In fact on the next day they increased coupon rates to rs 3000 and then introduced three different types of coupons Rs 3000,3499 and 4499 based on segment of travel. They are refunding all coupons as per announcement on their website.
"As per guidelines issued by DGCA (Directorate General of Civil Aviation) on 28th March 2012, they have barred us to issue tickets under this scheme now. We are thus not authorized to sell tickets under this scheme any more.

We regret to inform you that we will need to process a refund against the coupons issued to you".

The DGCA guidelines do not say that coupons can not be honoured. These were promissory notes for flight segments and should have been honoured. Even other carriers offer coupon booklets where the time,date and flight number is not given but can be booked with call centre. The Opaqeness criteria does not apply to coupons.
In any event, this should be decided by the regulator DGCA. In case they do not take a suo-moto recognition, perhaps moneylife should bring it to their notice.
I am going to great length to write these comments because not honouring of a promissory note is a serious matter, Cash has been paid upfront and the number of people affected is large.


In Reply to A kumar 5 years ago

Hello A Kumar,
I wasn't aware that VIA is now not honoring those coupons. So do they offer refunds, or have they decided to just give a lame excuse since they now have the upper hand as they are the ones now holding the payment.

Thanks in advance for your info.

A Kumar

In Reply to Shekhar 5 years ago

yes, their website says they are offering refunds. Good Luck!


5 years ago

Hi, I've been a reader of your blog and this column. I must say I disagree. First, there is no reason pointed out or evidence given that these "opaque" fares do not save money. The point of not discovering the airline is mentioned but thats something that the sellers of opaque fares have adequately disclosed.

Secondly, you just mentioned that the tickets "may" be on Kingfisher. No evidence towards that. And since the consumer wants to save money, he/she also assumes inherent risk and as long as the sellers of the "opaque" fares do not honor the tickets or do not refund the cost of the ticket in case of airline going bankrupt these are just allegations with no evidence.

I absolutely relish your insights but must say that this one is a bit disappointing.



In Reply to Shekhar 5 years ago


I am not sure if we are on the same page w.r.t. the first point you make. I am stating at the end that you will save money but it is not worth the headache you go through.

Secondly, the theory of Kingfisher tickets being offloaded has been there around for a while. I have received quite a few mails via the blog where people have been disappointed with the deal they got since it turns out on Kingfisher Airlines and the chances of the flight operating are 50/50 due to their current conditions.

My view is clear, you will save money, but you also don't know what you are getting into, which is something i am apprehensive of personally. I'd rather pay some more...


In Reply to AJ 5 years ago

I think its mainly to do with the fact that such tickets are on Kingfisher inventory and not that the business model has a problem.
I absolutely agree that lower fares doesn't mean that the consumer should be given poor service whatsoever a.k.a Kingfisher. The airlines do get their share.

I do think that the DGCA directive goes against free market and rather than completely stopping all opaque (I frankly dislike this connotation) fares DGCA should take Kingfisher to task. Such models have been successfully implemented elsewhere and this somehow just reeks of cronyism on part of the other airlines.

sandhya kulkarni

5 years ago

very very useful... you have really done a lot of work! many thanks.

We almost got conned by Makemytrip, even without opting for these really cheap fares. After selecting the fares, you click and get a message that the particular fare is not available and they are bumping you up to the next cheapest fare and you pay more. So we switched to Cleartrip and guess what, no increase. So is it a con or what??

I must say we were so tempted- but caution kicked in & the suspicion it wud be Kingfisher. Alas what a fall for Kingfisher.. there was a time when one felt bad that it was more expensive and we chose cheaper options!!

p k

5 years ago


yes I am a victim of this cheap

i flew from b'lore to Chennai , KF flight which took off after 3 hour delay..reached chennai at 13.30 hrs in place of 09 30 hrs. wasted 4 hours , for rs 1000 saving. just not worth it.
it is KF in most of the cases.

SEBI’s decision on Jalan Committee: Neither socialist nor capitalist and therefore unworkable

SEBI tweaks Bimal Jalan Committee Report and makes a mess of it. The new rules may favour NSE management but the investors of NSE, BSE and aspirant MCX-SX feel let down

The Securities and Exchange Board of India (SEBI) has virtually junked the Bimal Jalan Committee report on key issues, without saying so. In the process, it has pushed the exchanges into a scenario where they are neither in a socialist regime (they were not-for-profit, members-only associations before demutualisation) nor fully capitalist institutions chasing profits and innovation. The hybrid model will be unworkable and like SEBI's other measures, will have the unintended consequence of slowing down change.

Ironically, while SEBI has scrapped the Jalan Committee's recommendation not to permit listing for five years, it has, in fact, ensured that the bourses are no longer attractive investments either to retail investor or institutions. Under the new rules, the stock exchanges will be mandated to transfer 25% of their profits to the Settlement Guarantee Fund (SGF) of the clearing corporation to meet contingencies and 'black swan' events. How will investors react to this? Investors invest in companies on the assumption that its management and employees will strive to maximise profits for shareholders and that their effort will be fully reflected in the stock price discovered through fair trading on the bourses. But with 25% of the profits forced to be stashed away in a SGF, would investors still be interested in exchanges and listed entities? The answer lies in the fact that the Bombay Stock Exchange (BSE) has not issued any press release expressing delight at SEBI's recommendations. The idea exposes how bureaucrats and bankers sitting on the SEBI board are clueless about the basic philosophy and mechanics of a joint stock company.

Even if the BSE and its members manage to get it listed under the new rules, valuation is hardly likely to be attractive since it will only be based on 75% of the earning potential. This will also mean that if the BSE is listed at all, it will be fully focussed on maximising revenues by working in the interest of pattern traders, speculators, algorithm traders and other high volume operators. This is already distorting price discovery, affecting retail investor who hopes for short term gains and even mutual funds in getting the best price.

Most importantly, SGF is a critical part of maintaining stability of exchange operations. Why should it be funded out profits which will fluctuate from year to year? And if MCX-SX is allowed to launch its equities segment, it may not even be profitable. Will it then not need to contribute to a Settlement Guarantee Fund? Clearly, SEBI has not thought of the implications. What is also not clear is what happens to the current mechanism of SGF, where clearing members contribute. Will this be disbanded?

As for the NSE (National Stock Exchange), it has always been reluctant to get listed even though it has accepted large institutional investors and even individuals as shareholders. With the NSE's 'professional' top management already having wangled salaries that are among the highest in the corporate world, it would hardly want to be in a situation where this pay is directly linked to performance. The near monopoly bourse is now in a happy position-even if its lists its shares, in order to provide a "market determined" exit route to investors, it can always blame the SEBI for undermining its valuation.

The irony is that SEBI has taken the bourses, which are essentially market utilities providing an efficient trading platform, and left them in a vague space that is neither a capitalist venture, focused on the bottomline, nor a not-for-profit association that bourses were in the past. NSE chairman Dr Vijay Kelkar repeatedly refers to the bourses as utilities, although the NSE itself is a hugely profitable monopoly paying top salaries to its senior management.

SEBI's attitude is probably the outcome of blindly aping the failed American model and not having the vision and depth of understanding to work on a model that suits the Indian market. The SEBI board has retained the Bimal Jalan Committee's recommendation to cap variable pay, make it payable after three years and bar stock options. But we understand that this too will only affect the BSE, not the NSE.

As for future competition, SEBI rules as cleared on Monday (2 April 2012) make the business unattractive for MCX-SX, which was seen as a potential threat to NSE's monopoly. We also learn that the battle over the permission to permit it to start equity trading is far from over. SEBI, says sources, seems all set to appeal to the Supreme Court against the Bombay High Court verdict, essentially to avoid controversy or allegations that it is favouring MCX-SX.

The upshot is that neither brokers (stakeholders in the BSE which has got de-mutualised) nor bourses are happy with SEBI's new set of rules for stock exchanges. Another expert source told us, "The new rules spelt out by SEBI will make exchanges more bureaucratic and mechanical. They will go back to being a utility without room for innovation or competition".  The consequence, he says, will be the inability to attract management talent.

A leading broker could not hide his disappointment. He says, "Demutualisation of bourses was the first mistake. But we are now hoping that the exchange can get listed and we can extract some value out of our membership at a time when investors seem enthusiastic about bourses after MCX's successful listing".

He is also angry at the decision to keep brokers out of the governing board.  He says, "We are tired of being treated as non-trustworthy". However, this decision is prompted by the need to avoid conflict of interest issues that could arise if brokers were on the board and exerted influence over office bearers.

SEBI's policy on Market Infrastructure Institutions (MIIs) released on Monday says, "The stock exchanges will have diversified ownership and no single investor will be allowed to hold more than 5% except the Stock Exchange, Depository, Insurance Company, Banking Company or public financial institution which may hold up to 15%". But it will be interesting to see who lines up to acquire the shareholding and at what valuation given, the peculiar hybrid SEBI has created.

(Additional reporting by Aditya Govindaraj)



sunil hemnani

5 years ago

Well the SEBI ,which has made a mess of the whole thing has done so at the insistance of the Mof .So lets not give the SEBI so much credit for the pile of mess generated.Its obvious things are being done at Dilli which are conveniant for certain people.

Sankar Ray

5 years ago

Moneylife is arguably one of the very best mags in India

Nagesh Kini FCA

5 years ago

Dr. Jalan may have been a good government babu, followed on to being a RBI Governor and ultimately kicked up to be nominated to the House of Elders as an MP. Pray what is his track record and his hands on knowledge of the working of stock markets?

p v maiya

5 years ago

Bimal Lalan Committee submitted its report in 9 months after it was set up in February 2010. SEBI took 18 months to pronounce its confused verdict. Thus in 27 months of labour, SEBI has managed to do more harm than good for the development of eqity market and to further the cause of retailers.

Mutual funds lose Rs36,000 crore of assets in FY12

Among the top-five fund houses, HDFC MF, Birla Sunlife MF and UTI MF managed to improve their average AUMs in the last quarter

Hit by a downtrend for the third consecutive quarter, the mutual fund industry saw its total asset base shrink by about 5% or Rs36,000 crore in the just-ended fiscal year 2011-12.

Reaching its lowest level in more than two years, the average asset under management (AUM) of the entire Indian mutual fund industry dipped to Rs6,64,824 crore at the close of the last fiscal, ended 31 March 2012.

The decline of 5% in the last fiscal followed a decline of 11% in the previous fiscal 2010-11, when the total average AUM had dipped to near Rs7 lakh crore.

As per the data compiled by the industry body, the Association of Mutual Funds in India (AMFI), HDFC Mutual Fund retained its pole position as the country's biggest MF with an average AUM of Rs89,879 crore, followed by Reliance MF (Rs78,112 crore), ICICI Prudential MF (Rs68,718 crore), Birla Sunlife MF (Rs61,143 crore) and UTI MF (Rs58,922 crore).

While HDFC MF is the country's biggest mutual fund, Reliance Capital Asset Management Co (RCAM) is the largest and most profitable AMC in India, with total AUM of  Rs1,40,000 crore after taking into account MFs, government-sponsored public funds, managed accounts and hedge funds.

During the fiscal year 2011-12, the total number of retail folios or the number of investor accounts across all the 44 fund houses also declined by around 15 lakh.
Their total asset size has declined to a level last seen in July 2010, while it has dropped nearly 17% from the all-time record high of Rs8 lakh crore in May 2010.

Out of this, the total size of the industry has declined by around 11% in the past three quarters alone, while the dip during the last quarter (January-March 2012) was about 2.5% or Rs16,884 crore.

Among the top-five fund houses, HDFC MF, Birla Sunlife MF and UTI MF managed to improve their average AUMs in the last quarter, while that of Reliance MF and ICICI Pru MF declined.

Others whose average AUM declined during the last quarter included Franklin Templeton, DSP BlackRock, Kotak Mahindra, IDFC, Tata, Sundaram, Deutsche, Religare, Fidelity, JP Morgan, LIC, IDBI, HSBC, BNP Paribas, Goldman Sachs, Baroda Pioneer, L&T, Peerless, Taurus, Morgan Stanley, Pramerica, ING Vysya, Daiwa, AIG Global, Edelweiss and Bharti AXA Mutual Funds.

A total of 30 fund houses witnessed a decline in their average AUMs during the last quarter, while it increased for 14 others, which included SBI, Axis, Canara Robecco, Principal, Indiabulls, Union KBC, Sahara, Mirae Asset, Motilal Oswal, Escorts, Quantum and IIFL Mutual Funds.


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