Dnata has insisted it will consult management, staff and customers of Stella Travel Services brands before making any decisions on the future of its UK travel businesses.
The deal to acquire Stella Travel Services requires approval by the European Competition Commission, and the Emirates Group-owned giant said the delay would offer an opportunity to gauge feedback and develop a future strategy.
Iain Andrew, vice president of dnata’s travel services division, said: “We have signed a deal to acquire Stella’s UK businesses, which includes the five brands Travel 2, The Global Travel Group, Travelbag, Sunmaster and Triton Rooms, but the process has to go through a formal clearance process which takes five weeks and which we have to take very seriously.
“We legally cannot do anything with Stella until the EU has come back with their decision, so there’s very little I can say right now, but we will start talks with the senior management about the future as early as next week.
“We want to get as much input from the management, the staff and from customers. We will consult with everyone about what we do with the businesses going forward.”
“What seems like a delay is actually positive to us because it means we can sit down with all the relevant people to get their feedback. We will be going through a very open process,” he added.
Andrew stressed that all aspects of the Stella Travel Services business were “very appealing” and said he was “very excited about the opportunity that bringing together two excellent businesses presents”.
“We rate the UK travel market very highly indeed. Our Travel Republic and Gold Medal deals have brought an awful lot of value for dnata and we are very happy with Stella Travel Services as an organisation as well.
“We are impressed with what the management have done with the organisation; we have a respect for the team and for the brand equity they have established; and we are pleased with their performance – they are showing some very good trading results at the moment,” said Andrew.
He added that dnata would also be able to benefit from aspects of the Stella Travel Services business, a hallmark of its other UK travel acquisitions.
“In the same way that we have taken best practice and product from Travel Republic and Gold Medal, we would look to do the same with Stella Travel Services. They have some key strengths that we will look to take advantage of.”
Andrew said the Travelbag and Sunmaster business were of particular interest to the Dubai-based business.
“Dnata has a presence on the High Street in dnata Travel, but Stella has some unique skills and brands. Travelbag is a great business for example, and Sunmaster too is interesting as it isn’t a direct competitor OTA to Travel Republic as a lot of its business is done over the telephone rather than online.”
When asked specifically how dnata would look to operate both Travel 2 and its major rival, long-haul, trade-only operator Gold Medal, going forward, Andrew said:
“We are going to keep a very open mind on that. The most important thing is that we do what the customer wants. Genuinely, no decisions have been made.
“There’s nothing we’re going to do with the business [Stella Travel Services] – we’re leaving it alone during this evaluation period by the EU, but in five weeks’ time I should have much more detail around what we’re going to do, and what I can say is we should move fairly fast after that.”
Asked if acquiring Stella Travel Services would fill the gaps in dnata’s portfolio or fulfil its expansion plans in the UK, Andrew said there were still further opportunities.
“The market is still very active there [in the UK]. There are many opportunities still out there from the UK. There’s a fair amount we’re trying to do and we are looking at other parts of the world, but I have a really high respect for the UK travel industry. It has some great assets.
“We are working through a number of opportunities but we wanted to close this deal [Stella Travel Services] first before moving on. We are looking to widen our product range and hope to announce something on that soon.”
Andrew said he had been eyeing the Stella deal for the best part of 2014 but in formal talks to acquire it for the last four months.