Dnata Travel Services has strengthened its offering in the international corporate travel market with the purchase of a 20% stake in UK-based Hogg Robinson Group.The two companies have worked together for many years with Dnata being the HRG partner in the Middle East and West Asia region. This investment is seen as a long-term move to further develop the profitability of the two companies.
HH Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline & Group, said: “This is a significant deal for Dnata and the Emirates Group. I am delighted that the Emirates Group is being formally linked with a company of the calibre of Hogg Robinson Group and I congratulate all those at Dnata who have worked so hard to bring this deal to a successful conclusion.”
Iain Andrew, Divisional Senior Vice President, Dnata Travel Services, said: “Dnata has a long standing relationship with Hogg Robinson Group, which we are keen to maintain and develop. This investment signifies the level of confidence we have in our relationship with HRG and our desire to take that relationship to the next level.
“We view this as a long term investment, not a speculative move. Although the global economy in general and the travel industry in particular are facing challenging times, we believe they will recover and organizations that offer quality, professional and cost effective solutions will continue to do well.
“HRG works on a fee per transaction basis, therefore the company is not as directly affected by the high price of oil as some other companies in the travel industry, such as airlines. Furthermore, we believe the need for corporate travel services will not disappear and corporations will increasingly turn to international organizations, such as HRG, to help them effectively manage their travel spend.
“Despite the difficult circumstances faced by the travel industry, the combined synergies of the two companies and the possible additional revenue streams available to us, make this an economically attractive investment.”
Following this investment, Dnata’s total holding in Hogg Robinson is 61,366,000 ordinary shares, representing 19.99 per cent of the company’s ordinary issued share capital, making it the largest single investor.