Thanks partly to "a notable improvement in the traditional travel and entertainment category," American Express Travel Related Services yesterday reported record third-quarter net income of $606 million on 8 percent higher year-over-year revenues. A slight rise in the average merchant payment "reflects the relative strengthening of corporate T&E spending during the quarter," according to Amex's announcement.
"U.S.-billed business was up 14 percent, reflecting growth of 15 percent within the consumer card business, a 20 percent increase in small business activity and a 7 percent improvement in Corporate Services volume." T&E spending rose 8 percent, "reflecting improved growth among all T&E industries. U.S. airline-related volume, which represented approximately 12 percent of total volumes during the quarter, increased 10 percent on 5 percent growth in transaction volume and a 5 percent increase in the average airline charge." Travel commissions and fees rose 2 percent, the company said.
Amex officials said the company's recent Rosenbluth International acquisition
(BTN, Oct. 20), would be reflected in the fourth-quarter earnings report, while Navigant International said it would be 2004 before it detects fallout from the Amex-Rosenbluth deal. According to Navigant International chairman and CEO Edward Adams, the company is bidding on new business worth $2 billion in air sales.
"We are prepared to take advantage of improvements in the economy, which we believe will further strengthen corporate travel and related transaction levels," Adams said. Navigant today announced 1.7 percent lower revenues and a slight year-over-year drop in net earnings, but said transaction levels approaching those seen in 2002 seem to indicate that the industry is past its spring 2003 trough. Navigant officials added that the volume recovery has continued into this month.