Travelport reports positive key trading metrics for 2013

By Travolution
By Travolution
February 28, 2014 08:44 AM GMT

Travelport has reported increased revenue from its non-core air activities for 2013, a year of solid if unspectacular growth overall for the UK’s leading GDS.

Disregarding the loss of the United Airlines Master Services Agreement, the firm saw EBITDA (a measure of profitability) rise 5%, up $23 million.

However, with this included EBITDA was flat compared to 2012 at $517 million. Net revenue for the year was up 5% to £2,076 million and operating income was $208 million, up from $138 million.

Revenue per available sector (RevPas), another key metric for the GDS, was also up for the full year to $5.49, a 4% rise on 2012.

Growth in the fourth quarter of 2013 marked the 11th consecutive increase in RevPas for Travelport.

Travelport said its performance in the core air part of its business stemmed from attracting low-cost airlines to its new merchandising platform.

But outside of air the firm saw double-digit year-on-year growth in revenue of 16%.

This relates to activities such as advertising, hospitality and payments, and together these accounted for 18% of net revenue in 2013, up from 14% in 2012.

Travelport offers its RoomsAndMore aggregated hotel shopping platform to the trade and has a joint venture with Enett which provide payments solutions.

Gordon Wilson, president and chief executive of Travelport, said: “I am delighted to report a successful growth year for Travelport, with key financial performance metrics up 5% with positive innovation and traction across all aspects of the business.

“We maintain forward momentum in transforming our core air business and growing our beyond air initiatives of payments, hospitality and advertising. I am also pleased to note that this momentum has continued into the early part of the current year.”

Travelport says it has now deployed new point of sale technology to 75% of its targeted customer base.

In 2014 the firm has already signed a new long-term agreement with Orbitz and renewed and extended British Airways, Iberia, Iberia Express and easyJet contracts.

It has improved its debt position with a debt-for-equity exchange of $135 million, but a refinancing completed in April and June last year did see its interest payments rise in 2013.

Interest costs of $342 million for the full year 2013 were $52 million higher than 2012 due to higher interest rates on its debt.

Travelport reported it generated $100 million in net cash from operating activities for the full year 2013 compared to $181 million for 2012.

It said the decrease was primarily a result of increased interest payments, increased customer loyalty payments and changes in operating working capital.

Customer loyalty payments hit $78 million in 2013, up from $47 million, contributing to a reduction in Travelport’s unlevered cashflow to $246 million from $305 million.

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