Travel services aggregator Webjet has licensed its internet-based platform to travel agent Harvey World Travel in a deal tipped to help Webjet fund further development of its .NET-based aggregation platform.
If shareholders approve the deal, Webjet would continue to operate under its own name but Harvey World Travel would take 11 percent equity in Webjet, for $840,000, and might take another 26 percent equity within a prescribed time, the companies said in a statement.
Webjet would sub-license its travel service aggregation platform technology, developed with Microsoft and Galileo, to Harvey World Travel. It would also help Harvey World Travel to develop a consumer internet travel booking site and provide for a franchise internet operating platform, using the Webjet platform.
Barry Mayo, managing director at Harvey World Travel, said the deal would give the $1.4 billion global travel agency the right to sub-license Webjet's travel services aggregation platform software across its own network.
“The stake ... will generate additional revenues for Harvey World Travel, while at the same time ... creating a point of difference,” Mayo said.
Harvey World Travel managers in the corporate travel division, CT Partners, would gain “competitive advantage for a period of time”, he said, and consultant productivity was expected to improve as a result of the deal.
The new operating platform would help CT Partners' consultants get their customers the best fares, “improving accuracy” and savings, Mayo said.
David Clarke, managing director at Webjet, said Webjet expected to gain from the large travel agency's buying power. Harvey World Travel would help the latter capitalise on more opportunities in the rapidly changing Australian travel market and perhaps also in other parts of the world, he said.
“The [Webjet platform] advantage is that it can access and process data held, for instance, in diverse technology systems with different airline and hotel networks, and integrate it into a single display of total information,” he said.
“It has never been more relevant in an environment where new low cost carrier models continue to bypass traditional distribution channels and as a result open up enormous opportunities,” Clarke said.
Surveys had suggested that the Harvey World Travel brand name had one of the highest, if not the highest, awareness levels in Australia, Clarke added.
Webjet planned to issue up to 21 million ordinary shares to Harvey World Travel at four cents per share, to be subscribed for in three tranches of seven million shares each. Each tranche was dependent on certain performance goals, to be achieved in the first 90 days following Webjet shareholder approval.
Webjet had also invited the two Harvey World Travel board members to join its existing board of five, the company said.