Two Canadian based companies have been acquired by European travel giant Etraveli Group, in a move that will see the company grow its share and provide consumers with additional low-cost carrier options.
Flight Network and its B2B division Huntington Travel along with and travel technology startup TripStack will join Etraveli group in August, when it's expected it will receive approval from the competition bureau. TripStack Co-founder and FlightNetwork CEO Naman Budhdeo said the purchase will aggregate low cost carrier flights and put together virtual interline connections that were previously not available.
"The industry will see an enhanced B2B product from Huntington," Budhdeo said in an interview with TravelPulse Canada. "It will be flights they can't get with any other operator, we'll give them the full breadth of low coast carrier options. 1.7 million Canadians fly from Buffalo for example. Agents will now have the content right there for them to offer low cost carriers like Jet Blue or Allegiant to purchase, allowing more visibility and options to offer their customers."
Budhdeo says the move was really about scale, that in order to compete, companies have to get bigger.
"Travel is about scale, really that's what we've been trying to do. There are two ways to do this, you can either get bigger yourself or join someone who's bigger. We tried to acquire some big Canadian companies and most recently went after a big US merger unsuccessfully. We believe scale really matters, and what's next is to leverage that scale to grow those businesses."
Etraveli Group operates with multiple brands in more than 50 markets globally with strong positions in the Nordics, UK, France and Germany but also a noteworthy presence in Southern Europe, Australia and specific markets in Asia and the Middle East. The acquisitions give the Group a significant position now in North America as well.
"The deal will also speed up the Group's growing presence in North America, a market where we lately have seen our offerings and skill sets win market shares. Coupled with Flight Network abilities we believe we can rapidly increase our presence in this market," Mathias Hedlund, CEO of Etraveli Group explained,
Budhdeo cites a recent PHD study out of Madrid which found that 15% of international travel will be done via virtual interline travel, which is very hard for consumers to do on their own but with his company's merger, will give agents access to a big resource for their clients.
It's also a potential money maker for agents as, on average, booking virtual interline travel saves $200/pp versus a direct route.
"This will allow room for the traditional agent to add their fee and still be cheaper than other consumer options"
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