Travelmole Q&A: Graham Nichols on the Worldspan-Galileo merger

Q. What stage are you at now with the merger?
A. The merger is currently being reviewed by the regulatory bodies in the US and in Europe. We expect to close the transaction in the coming months. Mergers, of course, are complicated transactions, and take time. In the meantime, Worldspan and Travelport remain competitors, and our business relationships internally and with customers remain unchanged.

Q. What’s the next stage?
A. There are required regulatory approvals in the US and internationally that will determine the timing of the transaction. However, we expect to close in the next few months.

Q. Is there any risk that the merger might be blocked?
A. We do not anticipate difficulties in closing the transaction. A combined Worldspan and Travelport makes sense for all those concerned and maintains a healthy degree of choice for travel agencies and suppliers. However, if the transaction were to not close, Worldspan and Travelport would continue to operate as separate companies. Like any merger of companies this size, this transaction is subject to merger notification and waiting period requirements in various jurisdictions. We expect to receive all regulatory approvals over the course of the coming months.

Q. What is the future of the Worldspan brand?
A. Should the merger proceed as expected, Worldspan will become a Travelport company and will operate under its own brand, similar to how Galileo currently operates. Until we are merged we will operate as two separate companies.

Q. What will the merger mean for UK leisure and business travel agents?
A. In the short term, and until the transaction closes, there is really no effect on our customers, whether they are our leisure travel agents, business travel agents or our suppliers. We will continue to honour all our commitments to them. Once the merger is complete, the combined entity will have the content, resources, products, technology and relationships around the world to be an even more effective and efficient GDS for agencies that ever before. Its products and functionality will make agency customers more competitive and help them grow their business in ways never before possible. The feedback from our UK agents has been very positive since the announcement and we are looking forward to an exciting future with them.

Q. What impact will it have on your own workforce? Will there be any redundancies?
A. It is too early to speculate. This matter will be addressed if and when the merger is finalised.

Q. What changes will there be at senior level?
A. Prior to the closing, Rakesh Gangwal will continue to lead Worldspan and will be leaving the company following the completion of the merger. Jeff Clarke will lead the combined company as chief executive officer.

Q. What are your short-term plans following the merger?
A. Our sales plan for 2007 remains very aggressive and we anticipate continued success for the company.

Q. What about longer term?
A. Precise plans both for the long and short term will not be announced until the merger has been completed. However, we are confident that the resulting company will be very beneficial for our customers. The merged companies’ combined technologies, product capabilities, economies of scale, and resulting efficiencies will allow us to offer our customers an enhanced value proposition, unprecedented access to content, and much broader reach. Customers of the combined company in every country around the world can expect to benefit from the truly global presence of the new entity. I’ve outlined the huge benefits to our agency customers above and from the supplier point of view, they will be able to distribute their products more cost efficiently through travel agencies around the world that otherwise they may not have had easy access to in the past.

Q. Do you foresee further consolidation in the industry?
A. I would not speculate about plans of other companies in the industry, however, we have already seen a certain degree of consolidation in other areas of the travel industry such as airlines and hotel companies. The travel industry is growing at a fast pace and must continue evolving to meet the needs of ever more demanding consumers. The economies of scale, technologies and improved offering for agents and consumers which consolidation can offer make it an attractive proposition.

Graham Nichols is Worldspan vice president and general manager EMEAA