Terms were not disclosed but the deal effectively sees the end of the SAA’s control of its distribution division, ending a 20-year strategy for the carrier. SAA is believed to have wanted to sell its non-core airline operations for a number of years.
Travelport is talking up the deal as a significant move into a large regional market, with South Africa the largest of the travel markets on the continent.
The acquisition also sees the signing of a new five-yearÂ distributionÂ agreement between SAA and Travelport, giving Apollo, Galileo and Worldspan-connected agents access to the carrier’s published fares and inventory.
Travelport had already created a Worldspan operation for agents in the country in 2010. The purchase of Galileo from SAA will form a new division in the country known as Travelport South Africa.
Africa managing director Mark Meehan says:
“This change to our business model will enable us to work directly with all our local customers in the region to roll out relevant new GDS services and technology. This is also a long-term investment decision and builds on the recently expanded distributor network we have established across much of Africa with Johannesburg as a key regional hub.”
This is not the first such move by Travelport to consolidate its distribution interests in local markets. It previously bought Galileo Hellas in Greece in late-2010.
But it has run into difficulties with some National Distribution Company arrangementsÂ (locally owned entities which market GDS services to agents in return for commissions) in the past, not least in the Middle East where in 2009 it decided to transition away from the NDC model in the United Arab Emirates, Saudi Arabia and Egypt but ended up in dispute over fees with its former partners.
TravelportÂ incurred a $19.7 million “extraordinary cash charge” in the fourth quarter of 2011 due to an arbitrator’s decision which favoured a former NDC partner.
Meanwhile, Travelport has warned customers in the UK to be aware of a phishing email scam which surfaced within the Worldchoice travel agent consortium.
One agent is said to have opened the email and inadvertently given the creators of phishing email access to its system, leading to “a substantial amount of bookings”.
A Travelport official says:
“These emails have not come from Travelport and we are asking customers to contact their local Travelport helpdesk if they receive requests regarding customer data so that we can deal with them through our security processes.”