Travel guides go to Reed Elsevier - Second Look - Brief Article

Folio: The Magazine for Magazine Management, Oct 15, 1993 by Keith J. Kelly

Reed Elsevier in September acquired Oak Brook, Illinois-based Official Airline Guides, Inc., for $417 million in cash from the trust controlling Maxwell Communication Corp. OAG had revenues of $129.5 million last year with a pre-tax profit of $44.6 million. The price is a far cry from the $750 million that British-based media baron Robert Maxwell paid Dun & Bradstreet in December 1988. Not included in the deal is Standard Rate and Data Service, the monthly catalogs of advertising rates for consumer, trade and farm publications in the United States. Sources say a deal is expected shortly.

OAG will report to the Reed Travel Group, part of Secaucus, New Jersey-based Reed Telepublishing. Most of OAG's revenue comes from hard-copy publishing of airline schedules for North America. Principal publications include OAG Desktop Flight Guide, OAG Pocket Flight Guides, OAG Travel Planner, and the magazines Travel Age and Frequent Flyer.

Obvious cutback candidates will be in Oak Brook, where the OAG computer data systems are based, or in Dunstable, England, where the data system is based for Reed's ABC World Airways Guide. Combining the computer centers could cut some $15 million in expenses per year, says one source.

Even though Ian Thomas, CEO of Reed Telepublishing and chairman of Reed Travel Group, is British and the parent headquarters are in London, at least one industry observer thinks Oak Brook could emerge the victor because Thomas is already based in the United States and Oak Brook has the better computer support system. Also, the new owners are aware that the biggest chunk of worldwide business will still come from the United States.

Still up in the air is the fate of Frequent Flyer, a consumer business title in a unit without other consumer magazines, and OAG Travel Planner, which could be folded into Reed's Hotel & Travel Index.