Travelport GDS business declines 10% in Q3
November 13, 2008: Travelport today announced its financial results for the quarter ended September 30, 2008. The rate of growth slowed during the quarter with the GDS segment (Galileo, Worldspan) declining 10% and GTA to grow 2% year-over-year, the company said.
Travelport Limited, the parent company of the Travelport group of companies, today announced its financial results for the quarter ended September 30, 2008. Travelport recognized net revenue of $634 million and adjusted net revenue of $635 million for the third quarter of 2008, representing a (3%) decrease in adjusted net revenue over the same period last year.
Travelport CEO and President, Jeff Clarke, stated: “Travelport’s results in the third quarter of 2008 continue to show the resiliency of our business even during the unprecedented economic conditions that we are experiencing. The environment for travel continued to weaken into the 3rd quarter as the expected airline capacity reductions materialized. GDS segments declined 10% year-over-year during the quarter, and while GTA grew TTV 2% year-over-year, the rate of growth slowed during the quarter, reflecting softer demand and less favorable impact from currency compared to prior quarters. Despite these headwinds, Travelport was able to grow adjusted EBITDA 3%, primarily as a result of actions taken during the last two years to reduce costs and the Worldspan synergies we are currently capturing. During the quarter, we successfully migrated our Denver data center to our state-of-the-art technology and data center in Atlanta, which is expected to result in $45 million of run rate savings going forward. This effort was executed successfully and was the result of months of planning and testing by hundreds of employees at Travelport and United Airlines.”
Mike Rescoe, Travelport CFO, stated: “Our re-engineering cost savings and Worldspan synergies are proving effective in growing our EBITDA despite the challenging environment. During the quarter, we realized $47 million of cost savings from our re-engineering program, compared to $35 million of cost savings realized during the third quarter of 2007. We also realized $24 million from Worldspan synergies during the period. During the quarter, we decided to draw down $113 million on our revolving credit facility. While we have no immediate needs for the funds, we believed it prudent, given the unprecedented disruptions in the credit markets, to ensure we have access to the liquidity. Subsequent to the end of the quarter, we drew down an additional $147 million to further preserve our financial flexibility in light of the ongoing uncertainty in the credit markets. We repurchased at a discount approximately $58 million in principal amount of our bonds during the quarter. In aggregate, through the end of the third quarter, we have repurchased at a discount approximately $180 million in principal amount of our bonds, which will save us $18 million in cash interest payments on an annual basis.”