Well we knew the bleeding would be bad - we just didn't know quite how bad. Well today we found out.
Travelport's numbers are just awful.
A listen to the call was quite sobering. Given the downturn they reported in August and the forward outlook in the early days of that month we knew the cuts and the impact would be in excess of 10% and my estimate was north of 15%. What we have seen is now that the capacity cuts are still not enough. Early figures for November show a fall in excess Y/Y of 19% for Travelport as a whole.
I will be doing a more detailed review later - but I see this as a harbinger of change.
Clearly ARC's numbers and Travelport's are tracking downwards. October was off 15% and now we see early November is down 20%. That means that airlines are getting more direct business. it means that the ability for the GDS to maintain pricing will be hard. It also means that they will be under considerable pressure to continue incentive payments thus creating further pressure on the relationship with the airlines.
The battle lines are drawn now for next year's PCA negotiations between airlines and GDSs.
Prognosis is poor
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