Retirement for Travelocity CEO Jones announced

SOUTHLAKE, Texas -- The retirement, immediate departure and replacement of Terrell C. Jones, 53, as CEO of Travelocity was announced today, but it was not much of a surprise. Last month, Sabre completed buying those shares of Travelocity that it did not already own, a move that Jones had fought unsuccessfully in the board room, and he was a defendant in a stockholders' law suit.

A long-standing dispute between Jones, the founder of Travelocity, and management at Sabre, which owned 70% of the online travel company, became quite public almost two years ago. Jones appeared on the cover of eCompanyNow magazine and he was the subject of an amazingly frank article entitled, "Which of These is Scarier? A Big 'Ol Nasty Dog or a Guy Named Terry?" The flattering article told about start-up troubles for Travelocity and detailed problems with his detractors at Sabre.

In the article, Jones said his then boss, Sabre's President Michael Durham, gathered 40 senior executives in a board room and told Jones to justify 1% revenue on the millions he was spending. "I was nervous," Jones told the magazine. Jones said he knew that his detractors wanted nothing more than to see his pet project fail.

"Travelocity was hemorrhaging money, while the heads of other Sabre divisions -- profitable divisions -- were getting a thumbs-down on much-needed development funds," the article said. "Why transfuse more cash into the risky startup, Jones's opponents grumbled, when there were plenty of more conventional projects waiting for funding that would quickly give Sabre a return on its investment?" 

Big losses

The anti-Travelocity team recounted the big investments and big losses in punishing detail. But Jones and his team countered with a strategic argument. "We showed that it was growing like crazy," Jones told eCompanyNow. "If online booking became big, Sabre had to be there or it would have a heck of a time getting in later." Jones won that debate, but ultimately lost in his efforts to keep control of Travelocity.

In March 2000, at the peak of the dot-com euphoria, Sabre Holdings spun off a 30% stake of Travelocity. The shares were sold as high as $47 on the first day of trading.

Last month, Sabre Holdings Corporation announced that it had completed the previously announced short-form merger which resulted in Travelocity becoming a wholly owned Sabre company. The merger followed the company's successful cash tender offer of $28 per share for the outstanding publicly held shares of Travelocity.com Inc. common stock that Sabre did not own.

The retirement was announced in a press release issued by Sabre, crediting Jones with founding Travelocity and noting his 24-year career with Sabre in a variety of positions, including chief information officer, president of computer services, and president of decision technology before assuming his role as CEO of Travelocity in 1966.

Pioneer of online travel

"Terry Jones is truly one of the pioneers of online travel," said William J. Hannigan, chairman and chief executive officer of Sabre. "Under his leadership, Travelocity has developed a strong brand that symbolizes trust and reliability among its loyal customers. This has helped the company achieve profitability for the past five quarters. We thank Terry for his leadership and wish him well in his future endeavors."

Other Travelocity executives are also leaving the company. Chief Financial Officer Ramesh Punwani, general counsel Andrew Steinberg and Vice Chairman James Hornthal will be leaving for personal reasons, according to the Fort Worth Star Telegram. Also, James Marsicano, executive vice president of sales and services, is retiring.

New CEO

Sam Gilliland has been named the president and CEO of Travelocity, effective immediately. Gilliland most recently served as executive vice president, chief marketing officer of Sabre. Gilliland also served on the board of directors of Travelocity since 2000. 

"Our immediate decision to name Sam Gilliland as CEO of Travelocity was an obvious one," said Hannigan. "Sam is an exceptional leader with a track record for success. His unique mix of strategic vision, operational discipline, marketing savvy and technology expertise make him the right person to lead Travelocity in this next chapter." 

Gilliland joined Sabre in 1988 and has held a variety of positions, including group president of airline solutions, senior vice president and general manager of product marketing, and general manager of Sabre Business Travel Solutions, a business-to-business e-commerce unit. Prior to joining Sabre, he worked for Lockheed Missiles and Space in Austin, Texas. He holds a master's degree in business administration from the University of Texas at Dallas and a bachelor's degree in electrical engineering from the University of Kansas.