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Expedia to decrease TRX transction volume

August 20, 2008 | Online Travel

Travel technology firm TRX revealed that Expedia, its largest client, will significantly reduce transaction volumes processed through TRX products and reduce its use of TRX technology services, writes BTNonline.

“We have been informed that Expedia intends to decrease the volume of transactions that we service for them, as permitted under our current agreement with Expedia,” according to TRX’s second-quarter filings with the U.S. Securities and Exchange Commission.

“We are in discussions with Expedia regarding this planned reduction in services, and currently expect the decline in transaction volume to begin in the first quarter of 2009. In addition, a number of global airlines have announced significant capacity reductions, generally beginning in September 2008, due to high fuel prices and the related impact on air travel demand. In general, reduced airline capacity results in lower transaction volumes for us. If a significant decline in our transaction volume were to occur as a result of Expedia’s intentions to reduce the level of services requested from us and/or reduced volumes from our other clients, it is possible that our revenues, operating results and cash flows would be impacted and the impact could be material.”

According to the 10-Q report, Expedia and its affiliates accounted for 24 percent and 45 percent of TRX’s global revenues for the second quarters of 2008 and 2007, respectively, and 32 percent and 39 percent for the first six months of 2008 and 2007. Since Expedia’s inception in 1996, it has been a TRX client. A “Master Services Agreement” that runs through 2010 replaced the existing contract in December 2006.

Get the full story at BTNonline

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