Aviation travel software company, Datalex, has confirmed it is examining options to raise additional capital.

No decision has been made yet on the size of the investment to be sought or when it will happen, but chief executive Sean Corkery said it would be "material" and would be in a "medium term" timeframe.

"But I think more importantly is the importance that we put on having a strong balance sheet, going into an investment cycle that we believe airlines are going to make in digital commerce, and we want to be a partner that has a strong balance sheet," he said.

It is expected that the fresh capital will be used to repay an €11.3m loan provided by Tireragh, a company ultimately controlled by businessman Dermot Desmond.

In the meantime, Tireragh has extended the repayment date for the loan until 2022.

Mr Desmond has a substantial shareholding in Datalex through his company, IIU Nominees.

The fresh capital will also be used by Datalex to finance its working capital requirements through to the end of 2023.

The developments came as Datalex reported a 38% reduction in revenue last year to $28.1m, compared to $45.1m in 2019.

When once-off revenues are excluded, revenues declined by 29%, compared to a 65.9% drop in airline passenger demand over the 12 months.

A loss after tax of $6.5m was recorded, compared to $12.1m in 2019.

Datalex said it managed cash flow effectively despite the challenges posed by Covid-19 in the travel market and did not have to draw from an additional €10m loan facility provided by Tireragh last year.

"Overall we are pretty happy with them [the results] considering we serve the airline business," said Mr Corkery.

"We have kind of done better than a lot of companies that serve that particular sector, so in that sense we have punched above our weight somewhat."

Mr Corkery said in 2020 the company focused primarily on costs and on further development of the product, with new products rolled out towards the end of the year.

"We believe they auger well for our positioning in 2021, as the airline industry comes back," he said.

He said digital is being looked at by airlines as part of their comeback strategy, although there has been a slowdown on decision-making among carriers until there is more certainty.

Mr Corkery added that there have been signs of recovery in domestic travel in the US and China.