Travelport 2Q Bookings Down, Net Profit Up
by Michele McDonald /Bookings were down at Travelport in the second quarter, but the mood was up as the company reported its earnings for the period.
The 3% drop in bookings was expected due to the renegotiated contract with Orbitz in the U.S. and troubled markets in Europe, such as Ukraine, Russia and Greece, and the Middle East.
Revenue was flat, but Travelport had anticipated a $100 million headwind for the year from the double whammy of Orbitz and the return of passenger processing and operating systems to Delta Air Lines.
“Flat in this context is a blooming good performance,” CEO Gordon Wilson said.
Helped by a strong performance in the Asia Pacific region, the company’s Beyond Air strategy and the deleveraging of its debt, Travelport reported net income of $35 million for the quarter, compared to a $9 million net loss for second quarter 2014.
“It’s amazing what you can do when you don’t have to pay $300 million in interest,” Wilson said.
Beyond Air includes the eNett International payments subsidiary, where revenue was up 20%, and Rooms and More, the hotel and car rental agency portal.
Travelport’s hospitality attachment rate – the hotel and car rental segments sold per 100 airline tickets issued – increased to 48%, up from 43% a year ago.
Good news
Wilson said the good news for next year is that Travelport has signed enough new business that “we’ll probably get back more than we lost.”
He also points with pride to the popularity of Rich Content and Branding, a merchandising solution that allows airlines to showcase their flat beds, extra legroom, upgraded meals, and other products.
More than 110 airlines have signed up for RC&B, and more than 70 have gone live.
Airlines pay a per-booking fee on RC&B, but it is considerably lower than a GDS segment fee.
It’s an especially good deal for airlines “when you think of how much airlines spend promoting products to the travel trade and you are guaranteed they can see what you have to offer,” Wilson said.
Some travel agents, who had grown up in the business with the green screen, were initially resistant to using RC&B, he said.
But they’ve come around. “Selling all that in the old way is more difficult,” he said, adding that agents can actually inform their customers about what the airlines are offering.