The completion of The Travel Network Group’s deal to acquire The Global Travel Group took a long time because of the complexity involved and because it was done “unusually”, according to TTNG chief executive Gary Lewis.
Speaking on a Travel Weekly webcast, Lewis said he agreed with Global Travel Group owner dnata to make public his intention to acquire its 285 members in order to be able to “control the conversation” with those agents throughout the process.
That announcement was made in June with the deal finally completing on Monday.
Lewis said the process required a “huge level of trust”.
“We did it [the deal] unusually,” he said. “Due to our fantastic relationship with dnata and the existing Global team, we were allowed to make the announcement so that we could control the conversation with the existing Global members. So it was a huge level of trust.
“By announcing so early, it did put us into that situation where people were saying: ‘Okay, well why is it taking so long?’, but remember the complexity of what we’ve tried to do.”
Lewis added: “It’s the first time ever that an accredited body has moved, with the licensing requirements. There are 195 managed service members within the Global Travel Group, there are another 100 ‘Independent Options’ members who sit outside of the licensing requirements that are run by the Global badge.
“There’s a huge amount of technology that has to be transitioned over and understood; there’s a huge amount of financial protection models, so the trust structure for the central group, then also the legalities around the Civil Aviation Authority.”
He said: “There’s also a huge corporate entity in dnata, and Dubai, and I think it’s probably the first time ever that they have extracted something from the group. They’re obviously an incredibly professional organisation but also, they have a corporate structure that has to be gone through, especially when they’re making such a decision that is not core to their core business.
“It is significant; there are a lot of relationships that need protecting. And there’s a lot of legalities to sign off. So you’re moving money around, moving bank accounts, and getting approval for the strategy.”
Lewis said commercial negotiations were also lengthy and needed to be carried out while also liaising with the Global members.
“Actually agreeing something commercially is completely different to getting it written down legally, and that has also taken a huge amount of time; it was challenging,” he said.
“You’re trying to overlay all the negotiations with the consultations with the Global members to make sure they are feeling that they understand why they’re being talked to, because obviously, they’re still a moving beast; they are still trading, they’ve still got all the challenges.”
Lewis said Global members had already reported a difference since the completion of the deal.
“We’ve already resourced up the finance team and the team are already operating the financial mechanism of the Global trust account model, so that transition has already happened,” he said.
“We’ve been doing that for about the last six to eight weeks. So a big chunk of what would normally happen at completion has already been happening.”
He added: “Global agents are already in a trust account model, the Global Travel Group trust account model – so the members remain in that but we’re now operating it. That’s now part of the Travel Network Group and so it’s now our resource finance function that’s dealing with all those issues, refunds, payments, reconciliations.”