DreamFolks Shuts Down Domestic Lounge Operations: What Led To The Collapse?

DreamFolks Ltd. will cease all its operations in domestic airport lounge services, effective Tuesday, according to an exchange filing by the company.

The move will have a material impact on the company, the statement added without offering further details.

The announcement follows a disclosure earlier on Aug. 29, 2025, signalling potential changes to lounge contracts.

While domestic airport lounge services will be halted, the company confirmed it will continue other domestic services as well as its global lounge business.

DreamFolks also confirmed that client contracts remain active and the company is in talks with clients to present alternate value propositions.

The crux of DreamFolks' business has been its access to India's domestic airport lounges, which form the backbone of the company's offerings.

But trouble began when airport operators and service providers started finding out that they could just directly serve banks and card issuers - the same clients DreamFolks acted as a middleman for.

More recently, Travel Food Services Ltd. terminated its contract with DreamFolks, citing failed negotiations.

Operators such as Adani Airport Holdings, GMR Airports, and TFS cumulatively manage around 80-85% of the foot traffic at the airport lounges across the country.

Losing access to these operators left DreamFolks without its most critical asset.

The loss of DreamFolks' core business has weighed heavily on the company's shares, which has tumbled more than 65% on a year-to-date basis. And over a one-year period, the stock has tanked 72%.

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