Travelport Turns in Strong Third Quarter

Travelport is making “excellent progress” throughout what it has dubbed a “transitional year,” chief executive officer Gordon Wilson said.

The company reported net income of $5 million for the third quarter, compared to a net loss of $150 million in third quarter 2014. Revenue increased 6%, to $560 million, ahead of expectations.

The revenue increase was significant given that Orbitz, once Travelport’s largest customer for GDS services, shifted the lion’s share of its business to Amadeus and another cut as well to Sabre at the beginning of the year.

In addition, Delta last year brought its passenger services system, which had been hosted on Worldspan, in house.

Travelport’s market share in Europe was up three basis points from a year ago. Wilson said 80% of the growth came from three countries: the U.K., due to an improving economy, and the Netherlands and Sweden, due to the strength of online travel companies that serve several European countries.

Most regions of the world performed well, with the exception of the U.S., where the loss of Orbitz business led to a 13% decrease in booked segments and a 6% drop in revenue.

Worldwide, booked segments were down 5%, to 84 million.

Travelport’s Beyond Air initiatives, which include Rooms and More, the eNett payments business and Travelport’s new mobile business, now represent 24% of the company’s travel commerce revenue, up from 22% last year.

“That brings us closer to our goal of one-third of revenue,” Wilson said.

Travelport focuses on Beyond Air because “that’s where the growth is,” he said. “We’ve pretty much tapped out on air,” whereas the hotel business, car rental and eNett have huge growth potential.

A new revenue contributor comes from the air side, however. Travelport has begun charging a “small” fee for its Rich Content & Branding merchandising solution a year after it entered the marketplace.

None of its 125 current and committed airlines have backed out due to the fee, Wilson said.

At the Airlines Reporting Corp.’s TravelConnect user meeting last month, Cory Garner, managing director of distribution and data commercialization at American Airlines, said the carrier was “kicking the tires” with Travelport’s merchandising solutions.

“They kick hard,” Wilson said. Now the world’s largest airline, American is very detailed and meticulous in its examination of Travelport’s solutions, he said.

Pic: Malcolm MacLeod