Worldspan, Sabre sold: How will this affect the industry?

What a dramatic period of change! This past week has seen the online travel industry rocked by two major industry buy outs, during an unprecedented phase of transformation. Seemingly, in the short time it takes for the page of an online travel newsletter to load, another major GDS acquisition has taken place.

The recent purchase of Worldspan by Travelport Ltd. for $1.4 billion in cash, came as the first big industry shock. Rumors have been circulating for some time that it was in fact Amadeus who were in acquisition discussions with the troubled GDS.

Perhaps the writing was on the wall following Travelport CEO Jeff Clarke, and Worldspan Chairman, President and CEO Rakesh Gangwal’s comments at a recent conference in California. Both men seemed comfortable with the notion that consolidation amongst the industry is to be expected. Now Travelport will comprise Worldspan, Orbitz and Cheaptickets under their umbrella, further solidifying their position as the only GDS in all three main regions.

Coupled with this comes the latest news that Sabre Holdings have just yesterday been sold, for US$4.45 billion.  Private equity firms Silver Lake Partners and Texas Pacific Group, are now the proud owners of Travelocity and lastminute.com’s parent company. As the major US competitors of the now merged Worldspan and Galileo, expect to see some jostling for position over the coming months.

Major industry shifts like this are a rarity, and two within a week are a complete anomaly. Is this the mark of an industry slowly losing its grip on a once grand position, or as suggested by Jeff Clarke, are consolidations like this just par for the course? Is the increasing popularity of direct bookings gradually trivializing the need for traditional GDS’s? Why are many major industry players reporting record loses lately…

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Here more debate from featured companies Travelport Ltd. and Sabre Holdings, during the opening keynote session at the 2007 Travel Distribution Summit Asia in Singapore. www.eyefortravel.com/tdsasia2007
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