Ebookers to take on 1,400 staff in India as shares feel the heat

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The online travel company ebookers announced a three-fold expansion of its back-office and call centre operations in India yesterday. The news came as the group warned that trading in August had been affected by the heatwave, sending its shares into reverse.

Ebookers is to increase staff numbers in its Indian outsourcing business, Tecnovate, from 600 to 2,000. Based in New Delhi, the company's costs are 70 per cent below those in Europe.

The Indian expansion will be paid for by the $10m sale of a 6.25 per cent stake in Tecnovate to Mikal, an Israeli-based company. Mikal is run by Miko Gilat, a long-standing personal friend of the ebookers' chief executive, Dinesh Dhamija. Mr Gilat bought 15,000 shares in the flotation of ebookers by subscribing through the offer to "friends and family".

The expansion of Tecnovate will enable it to take on third-party clients in addition to its work for ebookers and Mr Dhamija said it was in negotiations with several major international organisations. Ebookers currently has about 1,100 staff in Europe and 600 in India. The Tecnovate expansion will more than double the workforce. In the second quarter to the end of June, Tecnovate contributed savings of £1.4m and Mr Dhamija estimated this would rise to £2m a quarter by the end of the year as it handled bigger volumes of business.

News of the Indian expansion helped make up for a downbeat trading statement which sent the shares 4 per cent lower. Ebookers, which specialises in medium to long-haul travel destinations, said the unusually hot weather in August had caused customers to stay at home and affected sales.

Bookings were also hit by the move to a new computer system, which meant that call centre staff had to enter transactions manually and so had less time to man the telephones. Mr Dhamija said, however, that bookings had bounced back in September and the company was increasingly optimistic about the prospects for the fourth quarter.