ORBITZ
WORLDWIDE, which is being primed for an initial public
offering, saw EBITDA increase 18% to $17 million in the first
quarter, on net revenue of $207 million, a 12% hike. The revenue
increase occurred because of a 21% increase in gross bookings,
including increases of 19% in the U.S. and 36% internationally.
Increases in air, hotel and vacation package transactions drove
domestic growth, Travelport said. And Galileo, which operates out
of a separate Travelport division, experienced an EBITDA decrease
of 12% to $117 million. However, Travelport stated that Galileo
recorded net revenue of $414 million, a 3% increase compared with
the first quarter of 2006. "Higher revenue resulted from growth in
GDS transactions, primarily in the U.S. and Asia-Pacific regions,
and higher international yields," Travelport stated. And the
revenue growth outstripped expected yield declines from U.S.
airline contracts, the company said. Galileo's segments rose 2% to
74.8 million.
MEANWHILE,TRAVELPORT'S ORBITZ WORLDWIDE
division will attempt to raise up to $750 million in an IPO, and
Travelport's private equity owners would retain all voting control
of the publicly traded subsidiary. Orbitz Worldwide, which includes
some 20 brands, did not disclose the exchange that the stock would
trade on, the percentage of shares Travelport's owners would retain
or the offer price. However, Orbitz Worldwide disclosed that
Travelport's private equity owners valued the Orbitz Worldwide
portion of the Travelport purchase in August at nearly $1.2
billion. So, Travelport will attempt to take Orbitz Worldwide
public, in one of the few consumer online IPOs in the recent crop
of offerings, to leverage a much higher public valuation of the
unit, reportedly at $2.5 billion to $3 billion, while keeping the
slower-growing Galileo, a cash-flow generator, private. The net
proceeds of the IPO would go to Travelport.
THE
EUROPEAN COMMISSION opened an in-depth inquiry May 3 and
gave itself another three months to probe Travelport's proposed
$1.4 billion acquisition of Worldspan after the E.C.'s initial
investigation "identified serious concerns" that the merger "might
lead to significant impediments to competition" in Europe. In its
now-concluded initial investigation of the Travelport-Worldspan
deal, according to the E.C., the pending merger appears as if it
would lead to "competition concerns" for suppliers in Europe and
for travel agents in the U.K., Ireland, Italy, Belgium, the
Netherlands and Hungary. A combined Worldspan-Galileo would be the
second-largest GDS firm in Europe, a standing Galileo holds on its
own now, and would have market shares ranging from 40% to more than
70% in those six European countries, the E.C. stated. Amadeus is
first, Sabre third and Worldspan fourth in Europe marketshare.
Travelport, saying the merger would increase competition, stated
that it still expects the deal to close in the third quarter after
the second phase of the E.C.'s review concludes.
SABRE CUT
OFF content-aggregator BookingBuilder Technologies' access
to the Sabre system May 11 and warned agencies that they would
violate their GDS contracts if they use Sabre in tandem with an
"unauthorized application" to book inventory outside of the GDS.
Chris Kroeger, Sabre Travel Network senior vice president, wrote in
a May 11 customer letter obtained by TravelWeekly.com:
"Using the Sabre system in conjunction with an unauthorized
application to facilitate shopping or booking outside the Sabre
system, or to merge back reservations made outside the Sabre
system, could result in the agency being out of compliance with the
terms of its Sabre customer agreement." He added: "Such use of the
Sabre system also represents a violation of Sabre's YK [passive
segments] policy and could result in the agency losing the ability
to create YK segments in the Sabre system." At issue is that Sabre
wants BookingBuilder to sign a developer agreement and prepay a
minimum annual fee of $100,000 plus $3.75 per booking to access the
Sabre GDS. BookingBuilder stated the actual tab would come to about
$700,000 per year. Thousands of Sabre agents use BookingBuilder to
check the Web against Sabre content for lower fares or to book
inventory, such as certain low-cost carriers, missing from the
Sabre GDS. BookingBuilder hasn't signed on and this week opted to
release a new version of BookingBuilder Desktop for Sabre users
that BookingBuilder said does not access the Sabre
system.
FARECAST, the air fare-prediction Web site,
ended its beta and officially launched May 15. The Seattle-based
company said new search functionality at launch includes "one-way,
multicity, nearby airports and any class of service." A new Flight
Quality Filter also enables users to sort searches by "red-eye,"
long layover, short connection and total duration. So, how accurate
are Farecast's fare predictions? The company cites a Navigant
Consulting study that pegged Farecast's accuracy at
74.5%.
Technology
Editor: Dennis Schaal
Phone: (201) 902-1904
[email protected]
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