DreamFolks Row: Why Major Banks, Card Networks Look To Part Ways With The Lounge Access Aggregator
DreamFolks came under flak in September last year, after disruption in its services affected access to 49 lounges at 34 airports across India.
DreamFolks Services Ltd.'s shares tanked on Thursday after news reports said key banks and card networks look to part ways with the global travel and lifestyle services aggregator.
ICICI Bank, Axis Bank and Mastercard are among the stakeholders who are mulling over a disassociation with DreamFolks, news agency PTI reported, citing sources. Other lenders and card services providers may also follow suit, it added.
These entities are now looking to establish direct partnerships with airport lounge operators, the persons privy to the development reportedly said.
An official statement from ICICI Bank, Axis Bank and Mastercard was not issued on the development so far. DreamFolks, however, said in a stock exchange filing that its relationships with all partners "remain strong and fully intact".
"Contract negotiation is a part of the regular business process, which is carried on annually with the clients and has no relation with the alleged news," it said.
ALSO READ
ICICI, Axis Banks Look To Move Away From DreamFolks After Service Disruptions; Others May Follow
Recent Disruptions In Focus
DreamFolks came under flak in September last year, after disruption in its services affected access to 49 lounges at 34 airports across the country.
Such was the extent of the trouble that Travel Food and Services, a food and beverage master franchisee that manages the airport lounge in Kolkata and Chennai, had reportedly threatened legal action against DreamFolks.
Operators such as Adani Airport Holdings Ltd., GMR Airports Ltd., and TFS cumulatively manage around 80-85% of the foot traffic at the airport lounges across the country. DreamFolks currently serves as the third-party aggregator for all these lounges.
AAHL, which operates seven airports—Mumbai, Ahmedabad, Lucknow, Jaipur, Guwahati, Thiruvananthapuram and Mangaluru—had charged DreamFolks with "violation of its agreements" through the unexpected disruption in services.
"...despite our requests, services through Dreamfolks have not yet been restored," the Adani arm had said in a statement on Sept. 22, while adding that it was accepting all major debit and credit cards from other access providers as an interim alternative.
DreamFolks, which had resumed the services after the temporary period of disruption, had claimed that all "contractual agreements remain in full force".
The service disruption had led to certain banks, including American Express, transitioning to Adani Digital for lounge access at Adani-operated airports, PTI reported, citing sources.
Trouble Likely In DreamFolks' Finances?
The likely disassociation of major lenders and card networks from DreamFolks, as claimed in the reports, is expected to severely hit the company's earnings.
The company's bottomline was under pressure in fiscal year 2025 as well, as the net profit declined by 5% to Rs 65 crore. The revenue, however, had increased by 14% to Rs 1,292 crore.
The news of ICICI Bank, Axis Bank and Mastercard looking to move away from the aggregator sent its shares plunging by about 14%. The scrip settled 9.35% lower at Rs 238.5 apiece on the NSE, compared to a flat close for the benchmark Nifty 50.
Disclaimer: NDTV Profit is a subsidiary of AMG Media Networks Limited, an Adani Group Company.
