The defections of online travel companies to other GDSs are making sizable dents in Worldspan's revenues and net income.

Like other GDSs, Worldspan's revenues also have shrunk due to lower transaction fees from airlines that have signed new distribution agreements. Worldspan reported a 14% decline in net income for the third quarter, to $15.5 million, on revenues of $212.5 billion, down 11%.

The company's online bookings decreased 17% in the third quarter. And on that front, the situation is likely to worsen: According to Worldspan's 10-Q filing with the Securities and Exchange Commission, Expedia has told Worldspan that it will "substantially increase" the number of its transactions processed on another GDS in the fourth quarter.

Expedia began moving some transactions to Sabre and Amadeus earlier this year. Expedia also indicated that "it could process almost all of its volume on another GDS in the near future," the filing stated.

Nevertheless, Worldspan told the SEC that it "believes that it will continue to process a sizeable portion of Expedia's transactions going forward, even if less than a majority of Expedia's total bookings."

Meanwhile, Hotwire terminated its technology services agreement with Worldspan on Oct. 26.

Priceline also has begun routing some bookings to Sabre, but Worldspan said it "has not received any notification from Priceline as to the volume of transactions that it intends to move." Last but not least, Orbitz could achieve a complete defection from Worldspan if it is victorious in litigation between the two companies. Orbitz already has diverted some bookings to Galileo, its sister company. Both are owned by Travelport.

In 2005, transactions generated by online travel agencies represented about 52% of Worldspan's total. Expedia, Orbitz, Hotwire and Priceline -- the company's four largest online agencies accounted for about 95% of its online transactions and about half its total transactions.

Although Gangwal has stressed that Worldspan would put more focus on its traditional travel agency market, bookings from that segment also have continued a slow but steady decline. All in all, the news is glum for Worldspan, once the star GDS in the online travel market, and it cranked up the rumor mill at the recent PhoCusWright Executive Conference in Hollywood, Calif.

Worldspan has long been the rumored target of acquisition by Amadeus, but the attention has now shifted to Travelport's Galileo.

During a panel discussion, Travelport chief executive Jeff Clarke said consolidation in the GDS industry is "inevitable."

"We're the only one with significant scale in all three major regions of the world," he said.

"With limited differentiation and fixed costs, there is no economic reason to have four GDSs," he said.

His remarks were similar to those often made by Worldspan chairman Rakesh Gangwal, who has all but posted a "For Sale" sign on the company's front lawn. Gangwal sought to put the best possible face on the company's misfortunes, saying that "the revenue decline in the quarter was largely offset through efficient cost management which kept our profitability healthy."