Amadeus, Travelport Upbeat on First-Quarter Performance

Despite spottiness in worldwide performance, the chief executive officers of Amadeus and Travelport sounded upbeat as they reported their companies’ first-quarter earnings.

Amadeus’ Luis Maroto said the company increased its market share to 39.8% of worldwide travel agency air bookings, a gain of 1.6 percentage points. The gain was due largely to significant wins in North America, including the deal with Expedia signed last year.

Travelport ‘turned a corner’
Travelport, which has grappled with debt and falling revenue over the last few years, “has turned a corner,” Gordon Wilson said.

It successfully refinanced and simplified its capital structure, and if the loss of United Airlines’ hosting business is not taken into account, its revenues were up 4%. The company’s balance sheet is “significantly strengthened,” he said.

Wilson said the growth of Travelport’s GDS business is outperforming the industry’s growth in several key regions: It grew 30% in Canada (versus the industry’s 8%); 28% in Eastern Europe (13%), and 1% in Western Europe (a 3% decline).

Rooms and More
Wilson said the key factor in its “positive momentum” is its technology products, such as the Universal Desktop, the Universal API and Travelport Rooms and More.

Rooms and More has been a particular success for the company: 450,000 hotels are now bookable through the system.

Wilson told Travel Market Report after the earnings call that hotels are just the beginning. “With our technology, we can do ground transportation, insurance, car rental brokers, you name it,” he said.

Now that Travelport’s legal wrangles with American Airlines are over, “in broad terms we have a good relationship,” Wilson said.

Travelport reported a net loss of $10 million for the quarter, an improvement over first quarter 2012’s net loss of $12 million on revenues of $548 million, down slightly from $550 million.

‘Healthy growth’ for Amadeus
Amadeus had “healthy growth” in revenue and Ebitda in the first quarter, Maroto said.

It also successfully extended several key contracts, including those with IAG (British Airways and Iberia), Air France-KLM and Alitalia.

Amadeus has brought several new low-cost carriers into the fold, and it has made “further progress” in its efforts to build a rail booking platform through a new deal with Thalys.

Overall, its air bookings were up 2.9%; non-air bookings were up 1.9%.

Amadeus reported adjusted income of €176.3 million (about $229.9 million), up 5%, excluding extraordinary items, impairment losses and other items. Distribution revenues totaled €612.2 million ($798.3 million), up 2.4%, and airline IT revenues were up 6.9%, to €182.9 million ($238.5 million).