For the Indian travel tech industry, the year 2025 saw a pivotal shift, driven not by demand cycles or festive peaks, but by regulatory changes, airline disruptions, and safety shocks that kept listed online travel companies under pressure.

The headwinds do not seem to have slowed down the industry from a 7.1% annual growth rate, contributing INR 22 Lakh Cr to the GDP in 2025, but the instability certainly forced businesses to re-evaluate their tech stack.

Their services were no longer judged only on pricing or inventories and, instead, if they could handle flight cancellations, airspace closures, aircraft groundings, and regulatory audits. While diversification hedged the financials for some of the companies in the space, those depending on a single core business suffered.

As the year comes to a close, Inc42 takes a look at the key developments that changed how travel tech companies operate.

DGCA Rules Force OTA Workflow Rejig

The biggest regulatory development of the year was the DGCA’s proposed 48-hour look-in window for flight tickets, which would reportedly allow passengers to cancel or modify bookings without penalty if the ticket is booked at least five days before departure for domestic flights and 15 days for international travel.

While the rule is still at the draft stage, its operational implications were clear enough for online travel agencies (OTAs) to start rewiring systems well before any formal notification.

On a typical domestic ticket, cancellation penalties range from INR 2,000 to INR 3,500 per passenger per sector for full-service airlines, and can go up to INR 5,000 for some low-cost carriers, over and above non-refundable fare components.

Under the draft rules, that penalty income effectively disappears for early bookings. Airlines and OTAs would also be required to refund all non-consumed charges, including airport development fees, passenger service fees, and security levies, with no option to push customers into credit shells.

The refund timelines have also been made stricter – seven days for card payments, immediate for cash transactions, and an outer limit of 21 working days for bookings made through agents or OTAs, even though airlines remain responsible for initiating the refund.

For OTAs, this directly affects working capital and backend plumbing. Refund processing, airline settlement cycles, customer communication and grievance tracking need to be far more automated and time-bound.

Platforms that historically relied on airline-side delays, manual reconciliation or refund float suddenly face higher complaint volumes and regulatory exposure. The significance of this shift becomes clearer when seen alongside real disruption events from 2025.

After the June 2025 Air India crash, airlines reportedly saw a 15–20% reduction in bookings in the immediate aftermath.

Similarly, episodes such as the cancellation of over 300 IndiGo flights in a short span in December exposed how quickly refund queues,........

© Inc42