A fine Eastern Pende Panya-Gombe African mask. Coll.: David Norden
One travel is bankrupt !
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OneTravel Holdings will emerge from bankruptcy in 45 to 60 days with a new owner, a downsized staff, a reduced cost structure and new technology that will enable the company to be profitable, according to OneTravel President and CEO Ed Wegel.
OneTravel's unpaid commissions remain a question (07/28/2006)
By David Cogswell found at http://www.travelweekly.com
it remains unclear whether the agents who sued OneTravel’s subsidiary FS
SunTours (a.k.a. SunTrips) will ever see their unpaid back commissions.
filed for Chapter 11 bankruptcy on July 7. OneTravel’s No. 1 secured
creditor, Palisades Master Fund, extended a loan of approximately $3
million to the company to keep it afloat while the reorganization takes
place. Palisades also put up a bid to buy the company.
talking to potential buyers,” said Wegel.
receive bids in the next several weeks. In six weeks we’ll hold an
auction, and the company will be sold.”
core business, which consists of the travel Web sites OneTravel.com,
11thHour-.com, CheapSeats.com and DiscountHotels-.com, is sound, Wegel
said, with $260 million in gross annual bookings.
has attributed its troubles to its purchase of SunTours, a traditional
wholesaler outside of its online business model. “That acquisition
turned out not to be successful,” Wegel said.
the online businesses have not been profitable either “for a number of
reasons,” he acknowledged.
company grew too fast. It needed to reorganize. CheapSeats bought
OneTravel from Amadeus, and there was an integration expense.”
company has now trimmed $8 million out of its yearly costs by cutting
staff and shifting from keyword marketing on Yahoo and Google to more
recently implemented dynamic packaging on its sites, Wegel said.
increased our net margin from 7.5% to 10%,” said Wegel. “The big ones
are in the 14% range.”
achieve such margins, the company needs to become less airline-centric, he
said, and sell more hotels and car rentals in packages. The company also
plans to redesign its sites to increase their “stickiness” and their
Anolik, the attorney representing agents who claim in a class action that
they are owed more than $1 million in commissions, vows to be a thorn in
early July, Anolik filed to force FS SunTours into involuntary Chapter 7
bankruptcy. At press time, he said he had not yet received a response to
his petition, and he said that OneTravel may try to pull SunTours into
Chapter 11 (reorganization) instead of Chapter 7 (liquidation), Anolik
they ask for reorganization, then we will protest and say that as part of
the reorganization they should pay off some agents,” he said.
To contact reporter David Cogswell, send e-mail to email@example.com
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