Travelocity revenues soar, losses slide in Q3

Avoiding the cruel summer that hit the airline industry, Inc. reported another record quarter for sales.

While much of the flying public found itself booked on canceled or delayed planes, Fort Worth, Texas-based Travelocity said on Tuesday that it gathered US$649.5 million in gross travel bookings, up 6.4 percent from its record $610 million in the second quarter.

It brings the company’s year-to-date totals to $1.8 billion in total bookings, almost double the business it did last year.

Revenue for the quarter rose 14 percent to $53.4 million. Net losses for the company dropped to $3 million this quarter, or 16 cents per share, far less than the predictions of 24 cents per share by analysts at First Call/Thomson Financial in Boston.

In a conference call, Travelocity President and CEO Terrell Jones stated a firm belief that the sequential growth will continue.

He said the Web site has been able to build itself up to handle the increased business and to add features like the ability to chat with a live booking agent online or to purchase a flight ticket using a Web-enabled mobile phone.

Jones said he was encouraged by the company’s performance, despite the fact that the summer months are traditionally the slowest in the air travel industry and that foul weather and labor disputes at Chicago-based United Air Lines Inc. caused airport jams across the nation.

Rival air-ticketing site Inc. in Norwalk, Conn., reported last month that it expects to fall $5 million behind its third-quarter revenue estimates because of the general travel chaos seen this summer.

Yet Travelocity has begun to make inroads in the higher profit-margin hotel, cruise, tour-package and car-rental areas. Chief Financial Officer Ramesh Punwani noted that Travelocity’s nonairline sales rose to 24 percent of total revenue, up from 20 percent and that its gross profit per booker was an all-time high of $21.70.

Lorraine Sileo, an analyst at Sherman, Conn.-based online travel research firm PhoCusWright Inc., said Travelocity’s strength is a result of the online travel customer base doubling industrywide this year.

She expects Travelocity’s main competitor, Expedia Inc. in Redmond, Wash., will post similar growth when it reports its earnings Oct. 30.

“People are just being drawn to these major brands,” she said.

Travelocity’s parent company, Fort Worth-based Sabre Holdings Corp., also reported a strong third quarter. It’s $667 million in revenue marked an 8.1 percent jump from last year’s third quarter. The company said that growth was driven by its electronic travel-distribution business.