DALLAS -- Worldspan's investment in Xtra On-Line gives momentum to
XOL's plans for an initial public stock offering and provides both
companies with additional clout in the corporate travel market,
according to Bill Diffenderffer, XOL's chief executive officer.
As reported, Worldspan bought a 25% stake in Dallas-based XOL as
part of an overall strategic relationship with marketing, technical
and product components. Worldspan, for example, will promote XOL's
PowerTrip.com
Internet-based booking tool as well as its own Trip Manager booking
tool, and Worldspan will be XOL's preferred CRS.
Diffenderffer said an investment from a company of Worldspan's
stature signals to financial markets that XOL "is going to be one
of the winners."
He declined to disclose the dollar value of the investment but
said that combined with funds XOL is raising in the private capital
markets, it puts the firm in the financial position to go through
with its IPO in the next 12 months. The timing of XOL's IPO is not
linked in any way to Worldspan's IPO plans, he said.
The alliance with XOL positions Worldspan to work with agencies
using other CRSs by adding a product to its portfolio that is not
tied to the Worldspan system, he said. As Worldspan put it, "The
agreement [enables] Worldspan to build on existing XOL
relationships with other travel management companies to enhance
Worldspan's presence in the fast-developing corporate booking
marketplace."
Diffenderffer said, "It broadens [Worldspan's] penetration. It
will have 25% of our success and an easier way of competing for the
back-end business."
As PowerTrip becomes more "pervasive," it will be easier for
agencies to switch CRS vendors, and Worldspan could get some of
that business, he said. Only a few of the agencies now actively
promoting PowerTrip are Worldspan-connected, he said.
Currently, PowerTrip accesses Apollo and Sabre, and
Diffenderffer said XOL will remain "very active in delivering our
product through them."
In cases in which the customer is focused mostly on the
PowerTrip product and there is a choice of CRSs, XOL will push
Worldspan, he said.
The Worldspan link should be accomplished within a couple of
months, and XOL is working on a development project with Amadeus
for access to that CRS, he said.
Worldspan and XOL said that through their new licensing and
technology relationship they will be able to cross-utilize product
features between PowerTrip and Trip Manager, making it faster and
cheaper to refine and streamline the products.
"A lot of development work is not all that sophisticated. You
want to be able to spread your costs as much as possible,"
Diffenderffer said. Worldspan's chief executive officer, Paul
Blackney, was until recently chairman of the board for XOL.