American Express Reports Strong Corporate Travel Sales Growth

American Express late yesterday reported a 17 percent year-over-year increase to $6.2 billion in global corporate travel sales for the second quarter, which ended June 30. Despite prevailing economic conditions, the company increased its global corporate travel sales after a slight quarterly decline in the first quarter of 2008.

Amex's Global Commercial Services segment, which houses corporate card and other corporate payment solutions and American Express Business Travel, reported second-quarter net income of $227 million, up 40 percent from $162 million for the same period in 2007. Revenues net of interest expense increased 21 percent to $1.3 billion, "reflecting higher spending by corporate card members and increased travel commissions." _

Overall, the company reported a 38 percent decrease in net income to $653 million compared with the prior year, while consolidated revenues net of interest increased 8 percent to $7.5 billion.

Noting the weakness in the U.S. economy, including deep slides and volatility in the credit market, reduction in consumer spending and record oil prices, Amex chairman and CEO Kenneth Chenault said in the earnings call, "Given the environment, we will continue to scale back some card acquisition efforts and reduce credit line selectively in the U.S. At the same time, however, we also plan to take advantage of growth opportunities, particularly in international and in the business-to-business markets."

Meanwhile, yesterday U.K.-based mega travel management company HRG issued an interim management statement, covering the period from April 1 to July 21, that said there was "little evidence to suggest that the overall level of business travel is reducing significantly. Certainly, route patterns for business travelers are changing with cheaper alternatives being sought, but so far our clients are still traveling."

On a same-client basis, client revenues were up about 3 percent from the prior year, according to HRG.