Cendant, the giant US conglomerate which owns Galileo, the Avis and Budget car rental company, Days Inn and recently agreed to buy hotel chain Ramada International from Marriott, has bought Orbitz, the online agency.
It paid $1.25bn cash for the agency which was set up by and is 70% owned by five US airlines, American, United, Delta, Northwest and Continental. The deal promotes Cendant into one of the leading players in the rapidly growing online market in America.
Orbitz had established itself as one of the US's three leading online travel agencies with Expedia and Travelocity. All three also have their own arm for business travel which have made great strides in America in attracting corporate clients by charging lower transaction fees than traditional agencies.
Cendant said the deal which has been agreed by both boards was still subject to some regulatory approvals but should go through in November.
It will continue to run Orbitz and its Cheap Tickets software as separate brands. Business travellers will be given the opportunity to use either Travelport, Cendant's corporate online agency or Orbitz for Business or even choose the best of each brand's solutions.
Samuel Katz, cxhairman and ceo of Cendant Travel Distribution Services Divison said the acquisition of Orbitz "immediately places Cendant in a leading position in the domestic online travel distribution business."
He added: "The transaction provides a foundation for significant synergies in technology, fulfillment and operations."
Ronald Nelson, Cendant's chief financial officer, said the deal perfectly fitted with his company's goal. "It is strategic to our travel distribution services and it substantially strengthens our compeitive position by ...enhancing our travel techology capabilities," he said.
For a company with GDS, car rental and hotels, its own ready made online agency would seem a natural acquisition.
The sale confirms just how fluid the online section of the market is at the moment. It follows in the footsteps of Amadeus, the Madrid-based GDS mainly owned by Lufthansa, Air France and Iberia, which recently bought a controlling interest of 55% in Opodo, the online agency set up European carriers.
E-bookers, another online agency, is also thought to be a target with apparent approaches from the IAC/InterActive Group which owns Expedia and possibly Sabre, also a leading GDS which owns Travelocity.