Travelport continues to show revenue gains as it delivers results for the first quarter ending March 31, 2013.
The distribution giant is reporting net revenue of $548 million, an increase of 4% year-on-year and adjusted EBITDA of $127 million, a 5% increase year-on-year, excluding the $25 million impact of the loss of the United Airlines Master Services Agreement.
Factoring in the impact of the MSA loss shows a slight decline of net revenue from $560 million for the same period in 2012.
President and chief executive Gordon Wilson says the company is outperforming its expectations and describes the performance as a promising start to the year.
Highlights include:
- 20% growth in hospitality, payment processing and services revenue which the company sees as a growth area going forward following investment. Wilson says revenue growth from those 'investment areas' increased 23% in Q1 while bookings for Rooms and More increased 250% in the same period.
- While Travelport's segments remain fairly static, down 1% for the period (and in line with global GDS volumes, Amadeus reported a GDS industry decline of more than a percent in figures also released today while its own growth was 2.9%), Wilson says the company continues to do 'airline deals and better airline business than in the past' and 'business around the world is growing in a number of places' including Eastern Europe where Travelport is up 28% and Canada up 30%.
"We're doing better than we planned to in terms of airline deals, the rates we are getting, ancillary revenues, hospitality and payment processing so it's all where it is meant to be."
- The company had its refinancing approved last month and has breathing space in terms of large debt maturity until 2015. Travelport says it has demonstrated numerous quarters of growth and does not see anything likely to knock it off course going forward barring a major incident which disrupts travel.
Wilson says generally there is a "feeling of momentum" both internally and externally with product investment in the
merchandising platform and enhancements to Rooms & More both contributing factors.
"We're winning contracts and have a pipeline in 2014 of known wins. There's better dialogue with airline customers and we're addressing how to get more low cost carriers into the system through the connectivity they want to use."
Other business:
The financial statement refers to $4m and $3m relating to litigation related cost payments for the three months end March 31, 2013 and 2012 respectively which Wilson says are to do with its legal wranglings with American Airlines, settled in March, as well refinancing litigation. He declined to comment on any settlement costs with AA.
On IATA's New Distribution Capability, Wilson reiterates support for industry standards that everyone can use but questions whether, in light of the launch of its merchandising platform, it's:
"...just a solution looking for a problem now we're [Travelport] doing what they say they want to do."