11 September 2008

Yes Mr Clark - that nasty drop is a trend

In the August 13th TravelPort Investor Call for analysts, Jeff Clark CEO pointed out a worrying drop in bookings for the first week of month of August.

Yesterday ARC released their monthly stats for August. Ouch. 13.61% drop.

So to be clear ARC measures cash sales and transactions. Never mind the cash at this juncture let's look at what really matters - transactions.

Total transactions were off. So far this year (January through August) we have had Year on Year falls every month except for February (which had an extra day) and April (with a rise of just .10%). So we can say that every month has been down.

This shows that the predictions of a drop off in the order of 10-15% in passengers begining September 1 is right. For once the airline planners got it right. For the GDS this is a pretty calamitous drop. Even with Travelport's international transaction stream - there is no way for their bookings to continue without a significant downward drop.

I realize that I am picking on Travelport here - nothing personal chaps - it is only because you have hard numbers. Neither Amadeus nor Sabre have those publicly available. Their numbers are likely to be just as bad for their GDS businesses.

I still maintain that the impact of the downturn is likely to hit the GDSs a little harder than the overall market.

So next quarter's numbers should be interesting.


No comments: