Beyond Air Strategy, Business Mix Boosts Travelport Revenue

Despite some challenges presented by the second quarter, Travelport held its own, buoyed by its Beyond Air strategy and its ability to derive the most revenue out of every transaction.

Revenue was up 9% over second quarter 2015, to $606 million. The company saw “particularly impressive results from our international regions, where revenue grew by 15%,” Gordon Wilson, chief executive officer, said.

Travelport scored the revenue gains on flat GDS segments, with international segments up 3% and U.S. segments down 6%. International bookings tend to generate more revenue, since they are often subject to higher “Away” pricing. The majority of U.S. bookings, on the other hand, are for domestic travel, which generate lower-priced “Home” segment fees.

The growth was particularly strong in Asia, including India and Indonesia, and in Latin America, where outside of Venezuela and Brazil, most countries are economically healthy.

International volume now represents about 60% of Travelport’s total, Wilson said.

Revenue from air bookings is getting a boost from airlines’ adoption of Travelport’s merchandising solutions. More than 200 airlines have signed up for Rich Content & Branding, with 170 implemented.

Revenue from Beyond Air initiatives--Travelport’s eNett International payments business, its mobile and corporate booking tool businesses and its hotel and car segments—was up 22%, to $148 million.

Travelport is integrating its digital assets—its Dublin-based Mobile Travel Technologies and Melbourne, Australia-based Locomote, a provider of corporate travel management solutions--and plans to “take this business to its next level of growth on an international basis,” Wilson said.

The company took an $11 million hit during the quarter due to the insolvency of Unister, a large German travel agency customer it signed last year. Unister filed for insolvency protection four days after several senior executives, including its chief executive officer, were killed in the crash of a light aircraft.

Under a long-term agreement with Unister, Travelport prepaid the agency’s volume incentive. As a result of Unister’s insolvency, “we can no longer be reasonably assured that sufficient economic benefits will return to Travelport that justifies holding that asset on our balance sheet,” Wilson said.