UK-based global travel data provider, OAG, announced on Friday, July 28, that it has acquired airfare data service Infare from Ventiga Capital. The deal brings the company’s total valuation to $500M (€453.3M).
Per the buyout agreement, management teams from both companies keep their positions and shareholding interests in the combined entity. OAG has also added more than 300 global employees across 10 offices through the acquisition.
“Together, we are enabling new and existing customers to thrive and innovate ahead of their counterparts,” says OAG CEO Phil Callow. “I am excited to welcome Infare colleagues to the OAG family.”
Ventiga Capital managing partner Carl Niclas Gabrán expressed his optimism that the acquisition would provide both firms growth opportunities within and outside of the air travel industry.
Infare co-founder and CEO, Nils Gelbjerg-Hansen, said the acquisition presents “a unique opportunity” to expand Infare’s services. Infare plans to add more product offerings in the future.
OAG recently received a new investment of an undisclosed amount from Vitruvian Partners, which it announced together with the Infare buyout. Vitruvian partner Ben Johnson said the private equity company is “delighted” to support the future of the combined firm with the funding.
‘Increasing dynamism’ in air travel market
Callow said the acquisition is a response to the “increasing dynamism” in the global air travel market. The acquisition enables OAG and Infare to provide clients with a comprehensive picture of airfare data.
Airlines can manage resources, predict travel demands and competition, and develop new models to boost revenues and growth. Gelbjerg-Hansen said global airlines rely on market intelligence to make informed business decisions. He also said Infare’s products would complement OAG’s existing technology.
Infare’s product offerings range from pricing and revenue management to analytics. One of its key products, Pharos, helps airlines navigate the competitive air travel market. It informs clients about pricing strategies used by their competitors so they can identify revenue opportunities.
OAG says its analytics platform Analyser helps clients gain commercial and operational insights into the aviation industry. The technology analyses flight schedules, connections, maps, and traffic patterns.
Besides serving airlines, OAG’s technology assists related sectors like finance and government.
Pandemic’s impacts on airlines
Experts suggest that the air travel industry is changing after the COVID-19 pandemic. Global consulting firm McKinsey predicts that there will be a “greater disparity” among airlines in the future. Airlines that responded to the pandemic by actively restructuring their organisations for greater efficiency would thrive while others might “muddling through.”
According to McKinsey, increasing investment in IT and digitalisation will improve an airline’s business performance. Data showed that airlines spent about five per cent of their revenues on tech before the pandemic, lower than 10 percent investment among financial services firms. Analytical companies like OAG have significant growth potential in the post-pandemic era.
“Market intelligence from OAG and Infare enables airlines to get insights into market trends and customer behaviour,” said Gelbjerg-Hansen. For instance, air trips are now dominated by leisure travellers instead of business travellers. Companies that mainly cater to business customers can gather insights from analytics to change their tactics post-pandemic to increase revenue.
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