Hogg Robinson confirms BA GDS fee deal

Hogg Robinson confirms BA GDS fee deal

Hogg Robinson Group today confirmed that it will not be subject to a €9.50 charge for making British Airways bookings via GDS as part of the New Distribution Capability.

The business travel company described the NDC-related deal with the airline as the first of its kind amongst global travel management companies.

In its first phase, bookings made via a GDS in key European markets will not be subject to BA’s Distribution Technology Charge of €9.50 per fare component.

“In addition to our on-going developments with British Airways and Iberia, we are also building new direct connections with American Airlines and Lufthansa,” HRG said.

The TMC added that it has further strengthened market leadership position in NDC and was ahead of schedule to make NDC content available to its clients in the second half of its current financial year.

The disclosure came as the company reported an expected drop in half-year revenue and profits in what chief executive David Radcliffe described as a period of transition.

Revenue was down by 7% year-on-year and underlying operating profit fell 17% at constant currency, “largely reflecting the previously indicated rollover impact of client losses and sales slowdown during the second half of FY17, as well as planned investment in strategic priorities,” the company said.

Pre-tax profit was down by 5% to £13.3 million in the six months to September 30.

A target of £20 million in annualised cost savings from a three year restructuring was exceeded with six months still to run and “further opportunities” identified.

An ongoing deployment of home workers means that almost a quarter of staff now work remotely.

Trading in the second half of the financial year to date was described as progressing in line with management expectations.

“While mindful that the group operates in markets that continue to be influenced by ongoing macroeconomic and geopolitical uncertainties, the board believes the group will deliver a full-year performance in line with its expectations,” HRG said.

Radcliffe said: “I’m delighted to see early and positive results from our new strategy for growth, the first phase of which has seen us invest in the future of our business.

“Performance is in line with our expectations and as previously indicated, this year is one of transition as we invest to accelerate growth and our investment to date is reflected in these numbers.

“Our re-focused growth strategy and the actions we are taking have been well received in our markets, with a pleasing number of new blue chip client wins reflecting the high quality proposition of our technology platform as well as our known reputation for delivering excellent service.”

He added: “Looking ahead to the full year, we are confident that we will deliver on our expectations and that our strategy positions us to accelerate growth across the group over the medium term.

“Reflecting this confidence in the future, the board has declared an interim dividend payment up 6% on prior year.”

New clients won in the half year included Cognizant, KUKA, LiLAC, Pladis and Rolls-Royce.

HRG’s technology arm Fraedom saw revenue rise by 12% with underlying operating profit up 30% at constant currency after planned investment to support an accelerated growth strategy, the company said.

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