Rang7.com

Rang7.com is an online travel agency (OTA), which is still on the stealth mode. The company is trying to build a business in India on the lines of the successful Orbitz—an OTA founded by a group of airlines. Rang7.com is in the process of cobbling up a group of airline backers to launch its service in India. The company is founded by Ram Seethepalli, who was formerly an MD with Travelport, which had been a major investor with Orbitz. Seethepalli exclusively spoke to VCCircle on his plans, and also clarified on media reports, including VCCircle’s, on Rang7.

Excerpts:

Why another online travel agency Rang7.com? Could you tell us about your business model?

The existing OTAs in the country - Makemytrip, Yatra and Cleartrip - are doing a good decent job for the Indian consumers. Our thesis is that India does not need another online travel agent if it is exactly on the same lines. It has got to be something different. If it is not something different, then it is just wasting time for the investors, employees, suppliers, and consumers. So I think the references to Opodo and Orbitz have been made (in relation to us)—and that’s the model what we are working on.

(Orbitz was an online travel agency floated in 1999 by airline such as Continental Airlines, Delta Air Lines, Northwest Airlines, United Airlines and American Airlines, in response to the threat of the independent online travel agents such as Expedia and Travelocity who were beginning to hold high distribution power.)

The belief is that GDS (Global Distribution System) fees is already low in India and that most of the airlines have their own portals for selling tickets - so how do you think the Orbitz model would work in India?

GDS fees is only one of the important parts of our model, and it is a misplaced belief that GDS fees are optimal in India. If our partner airlines are the ones saying that the GDS fees are low and that there are no savings to be had, I’ll shut my shop tomorrow.

(Orbitz came about because of the continued increase in Global Distribution System fees, which refers to a fee on booking done thorugh the worldwide computerised reservation network, a single point of access for reserving airline seats, hotel rooms, rental cars, and so on.)

How did you conceive the entire idea of bringing the Orbitz model to India?

It is my past experience. It is something I have done and I understand. If you look into my past life, you can draw some conclusions on how the idea came about.

(Prior to starting Rang7.com. Seethepalli worked with Cendant Corp/ Travelport in New York and Hong Kong as the company’s managing director and group vice president. He worked there for about 5 years from 2001 to 2006. Cendant had bought Orbitz for $1.2 billion in 2004 and later ebookers for $190 million. Cendant exited the entire travel distribution services business, called Travelport, in 2006 by selling it off to Blackstone Group-led PE consortium for $4.3 billion.)

When do you plan to launch the site officially?

The work’s in progress. I can’t really answer that but we have to get our strategy executed before we officially launch.