CWT Deal Latest Mark Of A Busy TravelSky

Carlson Wagonlit Travel announced a TravelSky-powered online booking tool for China-based travelers, called CWT Online, which it said already is in use by two "prominent" clients.

CWT announced that the "industry-first" product "gives travelers access to real-time international air bookings, including market fares, client corporate fares and specific airline promotional fares. It allows travelers to carry out searches by airline, type of ticket (one way or roundtrip) and by price. Each quote generated includes lowest fare, corporate fare, itinerary and link to service team information. Available in Chinese and English, CWT Online also incorporates travel policy information."

CWT since 2007 has offered a domestic booking tool in China, where global distribution system regulations pose significant limitations for GDS operators. CWT now is offering the international tool to all China-based clients.

TravelSky seems to be upping its game at a time when looser regulations are in store for the GDS industry in China, exposing the firm to more competition. Some of TravelSky's activity has been of the cooperative sort. In addition to CWT, HRG recently announced a new partnership to use TravelSky's "corporate travel technology." The Chinese GDS also added hotel content sharing deals with Travelport and Sabre.

But TravelSky also has "been actively preparing for the upcoming competition and has taken many notable steps in business development and product research, including a crucial upgrade to its passenger services system" for hosting airline reservations, according to a July 2012 report by PhoCusWright, which shares a parent company with The Beat, Northstar Travel Media. "TravelSky has reached cooperative development agreements with China's major carriers, including Air China, China Eastern and China Southern for a next-generation PSS. The next-generation PSS is expected to be completed in the next five years. Additionally, several important travel agencies, including Ctrip and China Unicom, signed exclusive agreements with TravelSky to secure the technical support and commit to the exclusive use of its distribution system for several years. The company also launched a new capability for low-cost carriers in early 2011."

Further, according to the PhoCusWright report, Chinese airlines also want TravelSky to "develop a distribution model that will allow Chinese airlines to cut distribution costs in overseas markets by bypassing foreign-owned GDSs." TravelSky reportedly "joined the Open Axis Group, which promotes the adoption of XML standards for the airline industry, in the hopes of facilitating low-cost overseas distribution and improving product differentiation for its shareholder airlines in global markets."

A TravelSky representative could not be reached to comment on the PhoCusWright report, but a financial filing by the company, which is listed on the Hong Kong stock exchange, confirmed TravelSky is researching a "new-generation aviation passenger service information system."

TravelSky during the six months ending June 30 reported 7.5 percent higher revenue of 1.8 million renminbi (US$284,000) and a 4.9 percent higher profit of 706,700 renminbi (US$111,408) thanks in part to 8.4 percent more flight bookings. Business with Air China, China Eastern and China Southern accounts for 46 percent of the company's revenues, but bookings for non-Chinese airlines grew more than 28 percent in the first half, compared with 7.6 percent for Chinese airlines. TravelSky employed more than 4,800 people as of June.

TravelSky also indicated in the financial statement that the Chinese "civil aviation industry is being affected by effects of weak global economic recovery" and "the declining growth pace of China's economy," and cited among a list of challenges and opportunities "the opening-up trend of the GDS market."