Galileo International, founded by a consortium of European airlines in 1987, and Apollo (then known as Covia) formed the Galileo Partnership in 1993, but they have remained discrete systems.
It is not clear whether Travelport plans to integrate Worldspan into Apollo or Galileo. Some observers predict that Travelport will retain certain elements of Worldspan's technology but jettison the basic platform.
"From a technology perspective we see significant synergies in consolidating the infrastructure, application development, etc.," Travelport chief executive Jeff Clarke said.
Galileo International, founded by a consortium of European airlines in 1987, and Apollo (then known as Covia) formed the Galileo Partnership in 1993, but they have remained discrete systems. It is not clear whether Travelport plans to integrate Worldspan into Apollo or Galileo. Some observers predict that Travelport will retain certain elements of Worldspan's technology but jettison the basic platform.
"From a technology perspective we see significant synergies in consolidating the infrastructure, application development, etc.," Travelport chief executive Jeff Clarke said.
But the issues of branding and the transitioning of customers are all to be determined, Clarke said, and the integration planning team can't act on any integration until regulatory approval occurs.
"From a selling perspective, we would be consolidating the sales forces into one overall team."
Travelport, the parent company of Galileo International, signed an agreement last week to acquire Worldspan for $1.4 billion. The deal has been approved by major shareholders of both companies but faces regulatory review in both the U.S. and the E.U. Clarke sees the potential for synergies to the tune of $50 million, which he called a conservative estimate.
The companies' strengths are complementary, he said. Worldspan would bring its Rapid Reprice tools and new search capabilities to Travelport, and it is "second to none in servicing the online market," Clarke said.
Galileo, on the other hand, is stronger in international markets, he said. Pending litigation between Worldspan and Travelport's Orbitz unit would be dropped, he said.
Clarke will lead the combined company as chief executive officer. Rakesh Gangwal, chairman and chief executive officer of Worldspan, will leave the company when the acquisition is complete. The integration team includes Terry Conley, chief administrative officer, and Pat Bourke, chief re-engineering officer, of Travelport; and Kevin Mooney, chief financial officer of Worldspan.
A Galileo-Worldspan combination has been rumored since 2001, shortly after Galileo itself was acquired by Cendant Corp. At the time, it was thought that the combination would not pass regulatory muster.
But the scene has altered in the last five years, and the four major GDS companies -- Amadeus, Galileo, Sabre and Worldspan -- no longer have a lock on how airline tickets are distributed. The Internet has enabled airlines and other suppliers to reach customers directly via their Web sites. Online travel agencies have developed direct connections with airlines. New companies such as G2 SwitchWorks and ITA Software have entered the distribution field. "You'll have three very strong GDS companies of about the same size," Clarke said, "and there are significant alternatives where consumers can get information.
"This will improve the competition. It makes us stronger in the U.S. against Sabre, and it will allow us to remain relevant in an industry that is changing very rapidly."
If the deal is approved, Travelport will face challenges in bringing yet another company under its wing.
"This will require strong leadership," AgentWare president Ivan Bekkers said. "There has been a total lack of direction at Worldspan, and they've had to buy market share with ridiculous incentives."
Since its own acquisition by the Blackstone Group, Travelport has again reorganized its collection of disparate companies, which include Orbitz, Gullivers Travel Associates, eBookers and Flairview Travel.
"What is the vision? What is the product offering? Whatever is innovative was acquired," Bekkers said. Worldspan has not flourished on Gangwal's watch. He took the reins when Worldspan was sold by Northwest and Delta to Citigroup Venture Capital and the Ontario Teachers Pension Fund in 2003.
At the time, Worldspan was the GDS of choice for major online travel companies, including Expedia, Orbitz, Priceline, Site59 and Hotwire. Gangwal declared that the company would refocus its efforts on its traditional offline agency subscriber base. But instead of building that business, Worldspan has experienced declines in both arenas as its major online clients began shifting bookings to other GDSs.
Despite the challenges, Vela McClam-Mitchell, former vice president and general manager, Worldwide Travel Supplier Services and now president and chief executive officer of Atlanta-based Market Designs, sounded a positive note. "Worldspan brings its superior fares and pricing expertise to a company that has much more global marketing experience," she said in an e-mail response to a query.
"Travelport understands the consumer facing side of the business, while Worldspan has proven its business-to-business prowess with its power pricing products for Expedia, traditional agencies and its airline customers."