Key Points:
- DreamFolks ends domestic lounge access.
- Other services continue; new models planned.
- Business model at risk; stock down ~10%.
DreamFolks Services Ltd., India’s largest airport services aggregator, has discontinued domestic airport lounge access for its customers effective Monday, raising concerns over the company’s business model and its future revenue streams.
The company, which has long built its business around facilitating lounge access for credit card holders, disclosed the change in a stock exchange filing. The withdrawal of this popular service is expected to materially affect DreamFolks’ performance, as a significant portion of its revenue was tied to lounge partnerships with banks and credit card issuers.
Lounge Access Halted, Other Services Unaffected
DreamFolks Services clarified that while domestic lounge access has been terminated, its global lounge network and other domestic services will remain operational. The company added that contracts with clients, including major banks, are still in force and that discussions are underway to introduce alternative value propositions for customers.
“While the domestic lounge business has been discontinued, we continue to engage with our partners to develop new models for customer engagement,” DreamFolks Services said in its filing.
Founded in 2013, the company positioned itself as a bridge between banks, airlines, and lounge operators, making airport lounge access a standard perk for many credit card users in India. With its aggregator model now under strain, the company faces a critical juncture in redefining its offerings.
Operators and Airports Move Away From Intermediaries
The setback follows a series of moves by major lounge operators and airport stakeholders to bypass intermediaries like DreamFolks Services and work directly with banks. Travel Food Services Limited, a leading lounge operator, recently terminated its agreement with DreamFolks and began negotiating directly with financial institutions to provide cardholder access.
Similarly, Adani Digital and Encalm Hospitality issued notices to DreamFolks to discontinue certain services. The Adani Group has publicly stated that direct partnerships with banks make intermediaries unnecessary, assuring passengers that cardholders’ lounge access will continue as long as their banks uphold existing terms.
Industry observers note that the aggregator model is losing relevance as operators and airports consolidate their control and seek stronger direct relationships with financial institutions. This shift threatens DreamFolks’ position as a middleman in an increasingly competitive and evolving sector.
Shares Under Pressure, Business Model at Risk
DreamFolks Services stock dropped by about 10 percent following the announcement, reflecting investor concerns over the company’s ability to maintain growth without its core domestic lounge service. Analysts suggest that unless DreamFolks successfully pivots to new offerings, its reliance on the lounge-access model could prove unsustainable.
The company’s promoter, Liberatha Kallat, has emphasized that DreamFolks is working closely with clients to design alternative engagement models, signaling that loyalty programs, travel-related privileges, or premium lifestyle services may form part of the next phase. However, details remain unclear, and the company faces mounting pressure to reassure stakeholders and stabilize its position.
With competition intensifying and partners moving away from aggregation, DreamFolks Services future depends on its ability to adapt quickly to the changing dynamics of India’s fast-growing air travel ecosystem.
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