Joint internet venture may offer cheap travel

By KARYN SCHERER

Fledgling internet travel company Travel.co.nz plans to introduce one of Europe's most popular websites to New Zealand.

The company's parent, Australian travel company Travel.com.au, has held talks with bargain e-tailer Lastminute.com that are expected to result in a joint venture set up on both sides of the Tasman.

Although the deal is in its early stages, it is likely to mean New Zealanders will be offered what is known in the industry as "distressed inventory" - dirt-cheap last-minute deals on travel, entertainment and gifts.

The London company will have just over 25 per cent of the joint venture.

Meanwhile, Travel.com.au will provide seed capital of $A3 million ($3.7 million) in exchange for just under 75 per cent, with an option to acquire the rest of the shares later.

The deal was confirmed yesterday by Travel.co.nz managing director Greg Southcombe at the official launch of the company's New Zealand website.

He said it was likely a separate website would be set up for Lastminute.com.

According to surveys, Lastminute.com is the second most recognised e-tailer in Britain, after Amazon.com. It listed last week on the London stock exchange with a market capitalisation of sterling 570 million ($1.8 billion).

Although the company has relationships with 25 international airlines, 500 hotels, 70 tour operators and 165 theatre and sports promoters, it collected just sterling 409,000 in revenue in the last quarter of 1999 and has not made a profit.

Travel.co.nz claims sales of around $50 million a year.

The company was enthusiastic about its future yesterday, but coy about its bottom-line. According to accounts filed with the Australian stock exchange last month, it made a $A324,000 loss in the six months to the end of December.

That loss contributed to a higher-than-forecast overall loss of $A3.6 million for its parent after abnormals. Total sales were higher than forecast, at $A48.6 million.

The New Zealand company is the result of a merger between Jetsave Travel and Gilpin Travel. It was bought in September for $1.5 million by Travel.com.au, an aggressive player which claims to be Australia's biggest internet-based travel company.


RELATED LINKS


Travel.co.nz

Travel.com.au

Amazon.com

LastMinute.com