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Travelport says its non-air business helped it face challenging market conditions in its latest financial report.
In its Q3 results, the distribution giant says Beyond Air, which includes its eNett payments business, helped Travelport deliver a 2% increase to net revenue of $623 million for the quarter.
The company’s EBITDA also increased 2% to $139 million, while net income was up 25% to $6 million.
The Travel Commerce Platform saw a 2% revenue increase to $598 million, 32% of which is attributed to Beyond Air, which saw a 14% increase to revenue of $24 million.
Air revenue declined 3% to $13 million for the quarter, which Travelport attributes to a dip in air reported segments following the loss of a large agency in the Asia-Pacific region and “other travel agency headwinds.”
The eNett payments business delivered a 58% increase to net revenue of $86 million.
Going forward, eNett should continue to see a growth rate of around 25%.
In a statement, Travelport president and CEO Gordon Wilson refers to “specific customer headwinds” which are affecting the company.
He adds that the company is in a good place for “longer-term profitable growth” based on deals, such as with Air India and Jet Airways, and technology and content investment around merchandising, mobile, data and payments.
Speaking to analysts, Wilson says those wins will help mitigate losses from specific customers in Asia-Pacific and Europe going into 2019 with the Air India deal kicking in at the beginning of the year.
He touched on the announcement in late August from Carlson Wagonlit Travel to renew contracts with Amadeus and Sabre by saying: “We have an existing contract with CWT to the end of 2020 but anticipate it will move a number of corporates from us, which will have an impact in Q4 and into 2019.”
He adds, however, that some corporates could change their travel management company and are already putting their business out to tender.
Responding to a direct question from an analyst, Wilson says he feels confident the CWT decision is not down to “content, product or service.”
He is also upbeat about the company’s growing share in the online travel agency segment, which he attributes to Travelport’s merchandising capabilities and the search response times it offers.
The company is using artificial intelligence to predict what is going to be booked via the OTAs and then diverting what he described as “full-fat search” to those bookings as opposed to less popular content.
Travelport believes full-year 2018 net revenue will come out at the lower end of its 4% to 6% guidance range.
Source: travelweekly.com
