Otto Freizeit Und Touristik and Travelocity Strengthen Joint Venture in Germany; Travelocity to Acquire Remaining Stake of Europe Joint Venture in Five Countries

MUNICH, Germany–(BUSINESS WIRE)–Aug. 23, 2004–Travelocity
Europe, a joint venture of Sabre Holdings Corporation’s (NYSE:TSG)
Travelocity(R) and the Otto Group’s Otto Freizeit und Touristik GmbH
(OFT), has announced a restructuring that will further strengthen its
businesses throughout Europe.

In a move that positions it for further growth in Europe,
Travelocity will acquire the remaining 50 percent of the Travelocity
Europe joint venture it does not already own, excluding the operations
in Germany, Europe’s largest travel marketplace. Travelocity and OFT
will continue their joint venture in Germany and further it by
leveraging OFT’s superior strength and travel know-how in Germany
along with Travelocity’s industry-leading products.

In the transaction, expected to be completed in the fourth quarter
of 2004 subject to regulatory approvals, Travelocity will pay OFT 26.6
million euro (approximately $33 million) for the businesses, which
include operations in the U.K., France, Norway, Sweden and Denmark.
Outside Germany, Travelocity retains the sole right between the
partners to any new operations in any countries in Europe. Sabre
Holdings said it expects the transaction to be $0.02 to $0.03 dilutive
in the fourth quarter.

This move allows the partners to put additional focus on their
respective core competencies: Travelocity’s and OFT’s continuing joint
venture in Germany will allow OFT to focus its expertise and
investment in its home country of Germany, where it has extensive
knowledge of the marketplace and runs more than 400 travel outlets. At
the same time, Travelocity will roll out its industry-leading
capabilities in both Germany and elsewhere under the leadership of
Dirk Hauke, CEO of Travelocity Europe.

During the past two years, Travelocity has developed best-in-class
capabilities for its U.S. business — including dynamic packaging, an
advanced merchant hotel program and revolutionary site design — and
the company can now begin making these available across its European
businesses. These capabilities, which helped Travelocity almost triple
its U.S. non-air transaction revenue during the period, will be
tailored to local needs in Europe, where online travel purchasing is
expected to grow more than 40 percent in the next year alone,
according to PhoCusWright.

“Through this agreement, we gain tighter operational alignment,
which will help us gain additional efficiency across Europe. We plan
to grow in Europe by leveraging our industry-leading capabilities
across multiple brands in a growing list of countries,” said Michelle
Peluso, Travelocity CEO. “At the same time, we continue to benefit
from OFT’s unparalleled travel industry expertise in Europe’s largest
travel marketplace.”

Gerd Massheimer, Member of the OFT Executive Board, said: “We have
opted for concentrating our travel activities on Germany, where we
already hold the number one position among those businesses which
operate independently of tour operators. The joint venture with our
outstanding partner Travelocity in the online sector is an ideal
reinforcement of our successful multi-channel strategy and is designed
to support our ambitious growth targets in the German travel

Travelocity Europe includes in the United
Kingdom, and Box Office in Sweden, and Arte
Udland in Denmark, and Ticket Service in Norway, and
Boomerang in France. The Travelocity-OFT joint venture in Germany owns
and operates,, Travel Overland and All of these companies together have more than two million

Travelocity and OFT have been equal (50/50) partners in
Travelocity Europe since they launched their joint venture in December

About Travelocity

Travelocity’s industry-leading technology and straight-talking,
honest information help travelers take more rewarding and affordable
trips. With 44 million registered users and booking nearly $4 billion
of travel in 2003, Travelocity(R) negotiates thousands of low-priced
deals with the world’s most reputable travel providers — top
airlines, hotels, car rental companies, cruise lines, and other
destination attractions and services. Additionally, Travelocity offers
deeply-discounted rates for weekend getaways and dynamic packages
through its Last Minute Deals and TotalTrip(SM) shopping engines, and
provides customer service support over the phone 24 hours a day. Based
in Southlake, Texas, Travelocity also operates Travelocity
Business(SM) for corporate customers, powers international travel Web
sites in eight languages, and has been recognized for its consumer
advocacy and global leadership in online travel. More information
about Travelocity is available at Travelocity is
owned by Sabre Holdings Corporation (NYSE:TSG), a world leader in
travel commerce. More information about Sabre Holdings is available at

About Otto Freizeit und Touristik GmbH (OFT)

The holding company Otto Freizeit und Touristik GmbH (OFT)
includes all tourism-related subsidiaries of the Otto Group. With its
combination of retail stores, call center, direct marketing and online
presence, OFT is one of the leaders in multi-channel travel
distribution. Contrary to the general economic trend in this sector
OFT saw a gross turnover increase by 18 percent to EUR 752m in the
travel sales in the financial year 2003. In Germany, the company is
already market leader among those businesses that operate
independently of tour operators.

OFT forms part of the Otto Group, which is operating approx. 123
companies in 19 countries in Europe, America and Asia. In the
financial year 2003, more than 55,000 employees achieved a turnover of
approx. 14.3 bn EUR. Today, Otto-Group is the largest mail order group
in the world and the world’s number two in B2C online trade, second
only to Amazon. Stationary retail trade constitutes the third pillar
of the successful multi-channel distribution concept at Otto. In
addition, several companies are active in the wholesale and services
sectors. Global corporate activities and a variety of strategic
partnerships and joint ventures provide Otto with excellent
opportunities to transfer know-how and to use the synergy potential

Cautionary Statement

Statements in this release which are not purely historical facts,
including statements about future plans, the expected benefits to
Travelocity or Sabre Holdings Corporation of the agreement described
herein, or other statements about anticipations, beliefs,
expectations, hopes, intentions or strategies for the future, may be
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. Readers are cautioned not
to place undue reliance on forward-looking statements. All
forward-looking statements are based upon information available to
Sabre Holdings Corporation on the date this report was submitted.
Sabre Holdings Corporation undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Any forward-looking
statements involve risks and uncertainties that could cause actual
events or results to differ materially from the events or results
described in the forward-looking statements, including risks or
uncertainties related to legal and regulatory issues and Sabre
Holdings Corporation’s revenues being highly dependent on the travel
and transportation industries. Sabre Holdings Corporation may not
succeed in addressing these and other risks. Further information
regarding factors that could affect our financial and other results
can be found in the risk factors section of Sabre Holdings
Corporation’s most recent filing on Form 10-Q with the Securities and
Exchange Commission.

    CONTACT: Travelocity Europe
             Europe (excl. Germany)
             Peter Heath, 44-1844-350-099
             Chintan Talati, 972-488-4790
             Simone Mandel, 49-40-27842-611

    SOURCE: Travelocity Europe