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Express Travel offers Magellan agents a new home

January 5, 2018 Headline News No Comments Email Email

“One of the top five shocks in my 45 years in travel!” That’s how Express Travel Group chief executive Tom Manwaring described the pre-Christmas bombshell disclosure that Helloworld was purchasing Magellan Travel Group.

Now, as outlined in Global Travel Media yesterday, Magellan agents have been offered another alternative. Express Travel Group, a well-established travel industry player, is offering Magellan agents their own platform – dedicated to high-end leisure and personalised corporate – under the Express Travel Group umbrella.

In an open letter sent to Magellan agents this week, Manwaring says that in his view, “the purchase by Helloworld drives a reduction in distribution competition and more importantly, removes independent choice for MTG members and agents across Australia. Therefore I felt it imperative to act.”

Express Travel says it’s offering “a new home for ex MTG members to consider”.

Tom Manwaring, Express Travel Group chief executive

It’s ready to roll now, Manwaring said yesterday, and it will involve an exclusive trust deed to be jointly and majority owned with members. Members will choose the name, while the exclusive trust structure will give them choice and control. It will be “supported and partnered with my Australian, family owned, fully integrated travel company, operating in Australia for over 32 years with a remunerated TTV of over 1 billion, over 100 staff and support from five divisions nationally,” Manwaring said.

Manwaring says the trust deed structure will ensure any change or sale cannot occur without an all-member majority vote. Express will conduct one-on-one and group meetings this month and next, covering details, discussion on minimum-entry TTV levels, individual business commercials and positioning.

Speaking to Global Travel Media yesterday, Manwaring said he considers Magellan members are “still in shock. They’re trying to work out where they stand”.

Manwaring says he wants Magellan members to know Express Travel is able to offer a stand-alone facility that would see “Magellan Mk II” (the new operation will be called whatever members decide to name it) run alongside Express Travel’s existing brands: Select Travel Group; Independent Travel Group; italktravel and the newly purchased Creative Cruising.

As for numbers, Manwaring says the original Magellan model was based on about 50 to 70 agents, which sounded about right. The quality of the agents was what counted and they were “very good, a great bunch of agents. Only recently they started to try to push the parameters a bit further and that added more agents to the group”.

Manwaring admitted he had “absolutely no idea” how many agents would take up the offer but the model Express was proposing might suit them better than a publicly listed company structure.

“We’ll have to wait and see what the appetite is for it.”

The proposed trust deed structure would prevent any sudden bombshell moves which caught members unaware, Manwaring said.

“Under a trust deed, that sort of thing can’t happen. It’s just a matter of getting the wording right, which they [the members] would be involved directly in creating. I think that’s reasonable given the quality of the agents and the amount of turnover. I would think to make it viable it’s got to sit somewhere between AUD 70 million and AUD 100 million in turnover, as a starting point.”

Members themselves could vet any future members joining, Manwaring said. “So there would be complete transparency around who’s coming and their quality.”

Express Travel Group is in no hurry. “The timeline for us is infinite really. I don’t see time as an issue at all. These are independent businesses. People in our Independent Travel Group, most of their contacts run out a year. Basically, they can come and go with the breeze – you can’t chain people to a desk and say ‘now you’re with me forever’.”

Manwaring added that time would tell whether the new unit consisted solely of ex-Magellan agents “or whether there’s a combination of other agents out there who want that type of model”.

MEANWHILE, Helloworld’s acquisition of Magellan is proceeding as planned, according to the latest word from Helloworld. On 22 December 2017 Helloworld informed the Australian Stock Exchange that the parties had “executed the formal transaction documentation to acquire the Magellan Travel Group”. The statement said that the transaction “is expected to complete in early January 2018”.

That’s the most recent official pronouncement on the matter, with a Helloworld spokesperson saying yesterday that the company couldn’t comment further without first advising the ASX.

Whether the official transaction document for Helloworld to acquire Magellan includes some form of minimum delivery requirement – in terms of number of member agents staying with Magellan – has not been disclosed.

Written by Peter Needham

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