Travelport’s First Quarter Air Bookings Down

This year will be a “transitional year” for Travelport, according to chief executive officer Gordon Wilson. Its legacy contract with Orbitz Worldwide expired at the end of 2014, and Orbitz renegotiated a new contract that allows it to use other GDSs as well.

Orbitz was Travelport’s largest customer for GDS services, and its new strategy is largely behind a drop in Travelport’s air bookings in the first quarter.
 
In addition, Delta Air Lines took over control of the data and intellectual-property rights of Deltamatic, its passenger services system, and its flight operations systems, which also led to a drop in revenue for Travelport.

Travelport reported a net loss of $7 million in the first quarter, an improvement over its $27 million loss in first quarter 2014. Overall revenue was flat, at $572 million.
 
Booked segments totaled 95 million, down 2% from 97 million in the first quarter of 2014.  

CEO perspective
After the earnings call, Wilson spoke with Travel Market Report about the future of the three GDS platforms that Travelport operates.

Some observers had speculated that once United Airlines migrated off the Apollo platform, Travelport would sunset Apollo. That migration took place three years ago, and the company has not taken any steps to pare its platforms down to two.
 
Wilson has adamantly maintained that he would never force travel agents to migrate to a new system against their will. But, he said, “the platform matters less and less. We share systems across Apollo, Worldspan and Galileo.”

Worldspan, for example can call on functionality that resides in Apollo. “The desktop becomes increasingly irrelevant,” Wilson said, especially with new products like Smartpoint and the Universal Desktop.
 
“There is a marginal cost to running three platforms, but it’s not a high priority for us,” he said. If at some point Travelport sunsets one of its platforms, it will be at a point where it makes no difference at all to the travel agents who use it, he said.

Growth in Beyond Air
Travelport was buoyed by healthy growth in its Beyond Air businesses – hotel and car rental bookings, the eNett International payments unit and advertising – whose revenue grew 14%. Beyond Air initiatives now represent 20% of the company’s Travel Commerce Platform revenue.
 
Wilson said he also was “excited by strong growth in the Asia Pacific region” and with the steadily increasing uptake of its Rich Content and Branding airline merchandising solution.

Of the 102 airlines that have signed up to use Rich Content & Branding, 63 are live with the product.
 
Regional losses?
Travelport experienced some share loss in the EMEA region, but Wilson said that should not be interpreted as losing share to Sabre, which claimed gains in the region in its earnings call.

Rather, he said, both Travelport and Amadeus have much larger presences in Europe and the Middle East than Sabre has.

Those companies, therefore, are far more vulnerable to the conflict in Ukraine and the geopolitical strife in Syria, Libya and Yemen.