RIVALS can quickly become allies if it makes business sense. Last year AXA Private Equity and Permira competed fiercely in takeover battles of two European travel websites. AXA won the upper hand in the bidding war for Go Voyages, a French travel website, while Permira snapped up eDreams, a Barcelona-based travel website that AXA also coveted. Now the two private-equity firms have joined forces in a takeover bid for Opodo, Europe’s biggest travel website.
With their recently formed alliance AXA and Permira are hoping to merge Opodo with Go Voyages and eDreams to create a proper European rival to Orbitz and Expedia, two American firms which are the market leaders. The official deadline for the bids in the auction of Opodo, run by JPMorgan, an investment bank, was January 25th. Apart from the private-equity duo, Carlyle, an American private-equity firm that owns Orizonia, a Spanish tour operator, and Expedia are likely to have submitted bids. In a few days Amadeus, the Spanish travel-technology firm that owns Opodo, is expected to reveal to whom it will sell the website, which was founded by a consortium of European airlines and first launched in 2001 in Germany.
Is consolidation good news for travellers? Generally a higher number of competitors means more choice for consumers, but in the fragmented online-travel business some consolidation is good news for buyers. The market leaders in France (Go Voyages) and Germany (Priceline) capture only a bit more then one-tenth of the online-travel market in their respective countries. Bigger companies have more negotiating power when they haggle over prices with airlines, hotels and insurance companies. “I don’t see a threat to consumers in a little more concentration,” says Christoph Klenner at the European Technology and Travel Services Association in Brussels.
The bigger question for European travel websites is how they can manage their relationship with airlines in the future. In America, the gloves are already off in what is increasingly a stand-off between airlines that want consumers to book directly on their websites and price-comparison websites, which lure consumers with claims that they offer the easiest way to shop around and find the cheapest flights. In December 2010 American Airlines stopped using all of Orbitz’s services as well as Expedia’s service for individual travellers because of a contract dispute. Southwest Airlines only makes its fares available on its website. And Delta Airlines told three smaller sites—CheapOair, OneTravel and BookIt—that their services were no longer required.
0 comments:
Post a Comment