Webjet (ASX: WEB) has today announced the acquisition of Canadian travel technology company Trip Ninja for an undisclosed sum, following the release of its 1H22 results which were buoyed by the recovery of the global travel space.
Founded in 2015 by Andres Collart and Brett Ziegler, Trip Ninja is a developer of several key products for traditional and online travel agencies to automate the manual process of selling complex international itineraries.
These include FareStructure - a technology that automates the combining of fares from carriers that do not have a cooperation or codeshare agreement in order to lower prices for customers - and FlexTrip, which automates the re-ordering of a multi-stop itinerary to deliver a better price.
Trip Ninja also has two other products under development that further automate fare search tasks that are currently done manually - Virtual Interlining (combining non-aligned carriers in a point-to-point fare), and Multi-stop dynamic packaging (combining air and hotels for multi-destination holidays).
“We see significant growth opportunities for the Webjet OTA [online travel agency] business as international travel starts to return. Traditionally, in a multi-stop trip, we were only able to combine airfares from carriers with codeshare agreements, however the Trip Ninja technology now gives us the ability to create complex itineraries combining non-aligned carriers in order to provide our customers the best price,” Webjet managing director John Guscic said.
“Webjet has always been focused on offering our customers the greatest convenience and choice and we believe this helps us do exactly that. Pricing comparisons using the products have shown material price reductions compared to existing pricing and will allow us to provide a genuine price advantage for our customers. We believe it will play a key role in helping grow our share of the international flights market.
“We are excited to have been able to acquire such an innovative business and are delighted the founders are staying on to realise their vision of automating the most complex areas of travel.”
The acquisition comes as Webjet announces it has seen its business turnaround in its first half to 30 September as global travel markets start to reopen, seeing revenues rebound by 143 per cent during the period.
While the company remains unprofitable, the loss in the half improved significantly, up from $145.1 million in 1H20 to $73.3 million at the end of September.
The company notes these periods are difficult to compare though, considering Webjet recently switched to reporting on a new financial year period now ending 31 March.
Meanwhile, Webjet’s hotel booking business has been profitable since July, with WebBeds’ 1H22 costs down 31 per cent compared to pre-COVID and on track to be 20 per cent more cost efficient at scale.
The half saw Webjet start to turn around in line with the broader travel industry restarting, delivering a cash surplus of $3.5 million per month compared to a $5.5 million average monthly cash burn in FY21.
“1H22 results largely reflect the turnaround in WebBeds with that business now producing positive cash,” Webjet managing director John Guscic said.
"Our decision to target new domestic opportunities while international markets were closed and expand WebBeds’ presence in the large North American B2B market has returned that business to profitability.”
The company had $446 million in cash at the end of 30 September, which gives it “significant liquidity and runaway, as well as the ability to pursue attractive growth opportunities”.
According to Guscic, the company is now focused on capitalising on travel recovery, with geographic diversification its core strength as different regions recover at different times.
“The half year results have demonstrated the power of Webjet’s geographic diversification and ability to sharply focus resources on those markets and customer segments that exhibit the earliest recovery patterns,” Guscic said.
“The opportunities are significant with pent up demand evident globally as we see travel snapping back as markets open. Our reduced cost base, enhanced technology and strong customer service ethos, in conjunction with a culture of constant product innovation, places us in a powerful position to capture bookings as the recovery continues.
“Our strong capital base also ensures we can take advantage of strategic opportunities as they arise in a realigned and changing global industry.”
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