Travelport President and CEO Jeff Clarke sounds optimistic about 2010, but made comments which might be interpreted to make the company appear to be cautious about a renewed attempt at an IPO.
Speaking to financial analysts today about Travelport's fourth quarter financial results, Clarke says the quarter was a "turning point" for all of the company's businesses.
For the quarter, the Travelport global distribution system unit saw EBITDA fall 3% to $133 million, and GTA's EBITDA decreased 5% to $15 million.
Clarke says GTA will fully recover when hotels' average daily rates rebound and he characterized the GDS business as "resilient."
He acknowledges that Travelport will face "headwinds" in 2010, particulary in the first half of the year.
Through mid-March, Clarke says GDS bookings are up 6% in North America, 6%-7% in Europe, nearly 20% in Asia-Pacific, and "in the single digits in the Middle East and Africa.
On the airline technology front, Clarke revealed that Travelport will face a $25 million setback in 2010 because of the Northwest-Delta merger and the consequent integration of the Northwest PARS reservations system into the Deltamatics system, both of which Travelport hosted.
Of the approximately $25 million, Travelport faces a net shortfall of $12 million to $13 million because it now manages just the Deltamatics system instead of hosting both, and the company is short another $12 million because Delta, a larger airline than Northwest was, pays the Travelport GDS less per segment.
Clarke says he's confident about 2011 negotiations with four network carriers in the U.S. (Delta's contract runs through 2013.)
He says Travelport provides "great value" to these airlines at "very reasonable" prices.
In the question and answer session with financial analysts, no one asked Clarke directly about Travelport's aborted IPO.
However, in response to a question about Travelport's "leverage," Clarke noted that companies in IPO mode have a certain cash structure.
"In this structure," Clarke says, making a distinction between an IPO status and the company's current situation, Travelport is "comfortable with the cash we have."
He says Travelport will be "opportunistic" with its cash and that if the company invests in something like an acquisition, Travelport will expect a "strong return."
Otherwise, Clarke says, Travelport will hold onto its cash or pay back debt.