Dreamfolks Services Ltd, widely recognized as India’s largest airport service aggregator, has recently made headlines by discontinuing its domestic airport lounge operations. The announcement shocked frequent flyers who had long associated the Dreamfolks airport lounge network with comfort, convenience, and exclusive privileges.
Although the company will continue to provide other travel-related services, lounges accounted for nearly 93% of its revenue. This bold move raises important questions: Why did Dreamfolks shut its domestic lounge services? How will it impact passengers, and what is next for the company? Let’s break it down.
Why Did Dreamfolks Exit the Airport Lounge Business in India?
The primary reason behind the closure of Dreamfolks’ airport lounge access in India is the shifting dynamics of the lounge aggregation market. For years, banks were the biggest clients of Dreamfolks. They partnered with the company to offer lounge privileges on their credit and debit cards.
However, the market has changed dramatically in recent years. Airports themselves have started acting as aggregators, directly collaborating with banks to offer lounge access. This reduced banks’ dependency on third-party service providers like Dreamfolks.
Additionally, leading lounge operators such as Encalm (which runs lounges at GMR airports like Delhi) and Adani’s Semolina Kitchens (responsible for lounges at Mumbai and Lucknow airports) have moved away from the Dreamfolks network. With such big names leaving, the Dreamfolks airport lounge ecosystem began shrinking rapidly.
The final blow came when major banks, including Axis Bank and ICICI Bank, pulled out of their partnerships. With both lounge operators and banks bypassing the company, Dreamfolks had little choice but to shut down its India-based lounge services.
What Does This Mean for Passengers?
For travellers, the closure of the Dreamfolks airport lounge service in India translates into immediate changes in access privileges. If your bank card was tied to Dreamfolks for lounge access, you can no longer use it to enter lounges.
However, if your bank has a direct tie-up with a lounge operator, you may still enjoy access. The gap arises for customers whose banks have not yet transitioned to new partnerships. Until those agreements are in place, these customers may face inconvenience during their airport journeys.
For years, the Dreamfolks airport lounge program simplified travel for millions of passengers, especially frequent flyers. Losing this service means travellers will need to rely on alternative arrangements or pay directly for lounge access until new partnerships emerge.
How Dependent Was Dreamfolks on Lounges?
The dependence on lounge services was massive. In fact, during its June quarter analyst call, Chief Business Officer Sandeep Sonawane revealed that nearly 93% of the company’s revenue came from lounges.
That means the shutdown of the Dreamfolks airport lounge business in India directly impacts the company’s core earnings. To put this into perspective, Dreamfolks reported a revenue of ₹1,291.88 crore in FY25, with a profit after tax of ₹65.05 crore. Without lounges, replacing such a large share of income will be an uphill task.
The company had already warned investors in its August analyst call that banks were under pressure to scale down their lounge programs. At the time, it also mentioned exploring new services beyond lounges.
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What New Services Will Dreamfolks Offer?
While the Dreamfolks airport lounge business has closed domestically, the company is not exiting the travel services industry. Instead, it plans to diversify into new verticals that align with evolving traveller needs.
Some of the alternative services in the pipeline include:
- Premium pick-up and drop-off facilities at airports in high-end cars.
- Visa application assistance for international travellers.
- Expansion into lifestyle offerings such as golf course access, wellness packages, and membership in social clubs.
- Railway lounge facilities to tap into India’s massive domestic travel market.
- Coffee outlets and retail tie-ups to provide travellers with more options.
This diversification shows that while the Dreamfolks airport lounge chapter is closing in India, the company is determined to reinvent itself by broadening its service base.
Expansion Beyond India: Dreamfolks’ Next Big Bet
The company’s chairperson, Liberatha Kallat, has emphasized growth in overseas markets as the next big focus. Dreamfolks is eyeing opportunities in Southeast Asia and the Middle East, regions where premium travel services and lounges are growing in demand.
By forging international partnerships, the company hopes to create a strong global footprint. The Dreamfolks airport lounge brand, once synonymous only with Indian airports, now aims to cater to a global clientele.
Moreover, the management has hinted at exploring strategic acquisitions and partnerships to speed up this transition. Although details have not been disclosed, such moves could help Dreamfolks quickly regain lost ground.
What Does the Future Hold for Dreamfolks?
For now, Dreamfolks faces the monumental challenge of rebuilding its business model. Shutting down the Dreamfolks airport lounge service in India means that over 90% of its revenue needs to be replaced.
Analysts believe that while international expansion and diversification are positive steps, it will take time for these new ventures to achieve the same scale as the lounge business. Travellers, too, will take time to adapt to the shift, as many associated Dreamfolks primarily with airport lounge access.
Still, the company’s strong brand presence, long-standing industry connections, and willingness to innovate could help it re-establish itself. In the long run, Dreamfolks may become less dependent on a single service, making its business more resilient.
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