Travelport continues modest growth, non-air and APAC stand out performers

Travelport attributes ongoing gains reported in its third quarter results to non-air business as well as international growth.

The company says net revenue increased 3% to $611 million although net income saw a 78% decrease to $5 million, attributable to an "increase in the provision for income taxes."

Travelport president and chief executive Gordon Wilson says the dip is to do with an error in the company's tax estimate which is specific to this quarter.

He adds that Travelport is still anticipating it will come in with its guidance for the full year wit EBITDA growth of between two and four percent.

Revenue for the Travel Commerce Platform was up 5% to $586 million, compared to 2% in the second quarter of this year.

The figure takes into account the decrease in Technology Services revenue of $25 million following the sale of IGT Solutions earlier this year.

Beyond Air revenue, which means hospitality and services such as eNett, was up 11% to $169 million and contributed 29% of Travel Commerce Platform revenue.

Revenue for payments company eNett increased 30% to $54 million.

The company says international revenue saw a 7% increase, while APAC saw a 12% increase in revenue growth.

Travelport president and CEO Gordon Wilson says:

"Our Travel Commerce Platform delivered revenue growth of 5% for the quarter, which included revenue growth across all International regions and a particularly strong performance in Asia where we continue to gain air market share. "Our leadership there has been further strengthened by our partnership with India's largest OTA, MakeMyTrip, together with the signing of Traveloka, which is the leading OTA in Indonesia and will now leverage our technologies to expand across Asia. "In Beyond Air, we continue to see good momentum in hotel and car bookings, while our commercial payments business eNett accelerated to 30% revenue growth for the quarter, driven by transaction growth with several major European and Asian OTAs."

Commenting on the latest twists in the distribution landscape including NDC and airline surcharges, Wilson says there are a number of interesting strands.

He says that few agencies, if any, are ready for NDC-style connections and that airlines are waking up to the fact that although NDC is a conduit for content, it does not take into account all the other processes involved in managing a booking.

A number of airlines, Lufthansa two years ago and this month British Airways and sister carrier Iberia, began adding surcharges on bookings made via the GDS.

As a result larger travel management companies including Amex GBT, CWT and HRG, have said they have reached an agreement with BA-parent IAG to avoid the surcharge for bookings made through "participating GDS platforms."

Wilson says Travelport is still in talks with BA.

He adds that airlines in general are beginning to change their model in recognition that one size does not fit all.

"This is not a GDS-airline change, it's broader distribution industry change."

Wilson says that in a "bizarre way" NDC and potential changes to the distribution model are doing the GDS a service by highlighting their value beyond aggregation.

Reporting Q3 results recently, IAG boss Willie Walsh said the company anticipated additional costs in the short to medium term.

He added that the company wants a relationship with the GDS companies but that the traditional model was "no longer fit for purpose."

"We need a model that works for the future and not one that is structured around the past."