travelsky
3 days ago
 

Travelsky financials show stronger growth in 2016 than western peers

Travelsky’s 2016 annual report highlights the scale of the business and the range of services it is currently offering to China’s airlines, airports and agents, with a hint that it might be looking at opportunities overseas.

The 185-page densely-packed document covers topics familiar to anyone familiar with annual reports from Amadeus, Sabre and Travelport.

Comparisons between the three are possible, to an extent, although some of the terminology used by Travelsky, which is listed in Hong Kong, differs from its US and European peers. Currency fluctuations need to be factored in as well.

In 2016, Travelsky recorded revenues of RMB6,223.2 million, booking an EBITDA of RMB3,216.8 million. In RMB terms, these metrics are 13.7% and 19.5% ahead of the previous year.

At today’s exchange rates, this converts into revenues of $904 million and an EBITDA of $467 million.

When Sabre reported its 2016 results in February its revenues were $3.4 billion (up 13.9% on 2015) while its adjusted EBITDA came in at $1 billion (up 11%).

Travelport meanwhile told the US markets of a FY2016 net revenue of $2.4 billion (up 6% on 2015) and an adjusted EBITDA of $574 million (up 7%).

Madrid-listed Amadeus ended 2016 with revenues of €4.5 billion (up 14.3% on 2015 in euros, converts to at $4.8 billion today) and an EBITDA of €1.7 billion (up 16%, converts to $1.8 billion today).

So compared with its western peers, Travelsky is smaller in terms of revenues and EBITDA although its margins seems greater, and its year-on-year growth profile is stronger. Travelsky also concentrates on one market (granted, that market is China) and is very much an aviation-focused business.

The annual report conveniently outlines Travelsky’s business units. Its biggest unit is “aviation information technology services” which covers what it describes as electronic travel distribution, inventory control, computer reservation systems and airport passenger processing services.

This unit works with 38 commercial airlines in China and more than 350 foreign and regional commercial airlines. It processed 524.2 million flight bookings on domestic and overseas airlines during 2016.

Its “accounting, settlement and clearing services” is the downstream business of the above, and is the world’s largest service provider of IATA billing and settlement plans (BSPs). In 2016 this unit handled more than 800 million transactions and more than 300 million BSP tickets.

Other multi-digit metrics appear in the travel service distribution network unit, which serves as a GDS for Chinese travel agents (with connections to the global GDSs). Some 70,000 sales  terminals at 8,000 agents and distributors connect to this network, and in 2016 it processed more than 420 million transactions valued at RMB424.8 billion ($62 billion).

And there are airport IT and air freight logistics IT services as well.

Travelsky’s dominant position in China is well known, but in the report chairman Cui Zhixiong hints at international ambitions, talking about “seeking breakthroughs in overseas businesses”. Perhaps its purchase of OpenJaw was the start of something big.

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Martin Cowen

About the Writer :: Martin Cowen

Martin Cowen is contributing editor for Tnooz and is based in the UK. Besides reporting and editing, he also oversees our sponsored content initiative and works directly with clients to produce articles and reports.

For the past several years he has worked as a freelance writer, specialising in B2B distribution and technology.

Before freelancing, from 2000-2008, he was launch editor for e-tid.com, the first online-only B2B daily news service for the UK travel sector.

 

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