Amadeus Full Year 2005 Results
Company attributes success to a balanced focus on core business and diversification
Madrid, Spain, 24 April 2006: Amadeus, a global leader in technology and distribution solutions for the travel and tourism industry, today announced its financial results for the full year which ended on 31 December, 2005.
Total bookings grew by 4.2% to 473.3m. Online bookings, from all providers, grew by 34.1% and now represent 12% of the total. Amadeus retains its leadership position in travel agency air reservations with 29.24% of the worldwide market share at the end of the year, up 0.44 percentage points year-on-year. Total revenue grew by 17.6% to EUR 2,418.3m, with an increasing proportion coming from IT services.
“In 2005 we extended our core business and achieved key milestones in our diversification strategy,” says José Antonio Tazón, President and CEO, Amadeus, “In our distribution business, we secured the low-fare content of the world’s most important airlines, including fifty-seven airlines which signed up to our Full Content Option. The programme gives travel agents access to their low fares, full schedules and last-seat availability. Similarly, travel agents can now book 61,000 hotels in the Amadeus distribution system, which is 4,000 more than a year ago.”
“In airline IT, the Star Alliance signed a milestone contract for a common IT platform and we launched a suite of IT solutions for low-cost carriers. On the hotels side, 6,500 hotels now use Amadeus technology solutions. Over 99% of travel agencies connect to the Amadeus system using internet protocol and we have migrated over 200,000 travel agency points of sale to the browser-based Amadeus Selling Platform.”
“All this was achieved while we were the subject of the third-largest leveraged buy-out in European history. Now that Amadeus is a private company, we are not obliged to publish financial results but in the interests of transparency we will issue periodic updates of revenue, bookings and market share.”
Business Highlights
Travel content
During the year, Amadeus secured the low-fare content of the world’s most important airlines. Fifty-seven airlines signed up to the Amadeus Full Content Option – available to airlines in Europe, Middle East and Africa. The airlines agreed to give Amadeus subscribers low fares, full schedules, last seat availability and associated inventory for distribution through all channels. Amadeus has similar agreements with many other airlines including Air Canada, American Airlines, British Airways, Continental Airlines, Delta Air Lines, United Airlines and US Airways.
Amadeus added a total of 4,300 hotels to its system during 2005: increasing the number of independent hotels in the distribution system was a focal point of the campaign.
In March, Amadeus was the first GDS to sign a global agreement with Holiday Autos for leisure car rental. The agreement makes the company’s 750,000 bookable cars at 4,000 worldwide locations available in Amadeus Cars at the Complete Access Plus level of connectivity.
Travel agency
Amadeus announced new travel agency contracts with Big Travel/Flex Resor (Sweden), Carnival UK, Wings Corporate Travel (South Africa), lastminute.com and L’alianXa Travel Network, Latin America's leading international travel agency consortium. Travel/Flex Resor, Carnival UK and Wings Corporate Travel use Amadeus point of sale technology to book, invoice and fulfil payment for bookings which will be processed through Amadeus’ travel distribution system.
Amadeus has upgraded over 99% of travel agency connections to internet protocol and over 200,000 travel agency points of sale to the browser-based Amadeus Selling Platform. Amadeus Selling Platform is the first browser-based point of sale platform to allow travel professionals to focus on selling travel and developing customer relations instead of just making bookings.
Hotels
In February, Amadeus announced the successful completion of the acquisition process of Optims, the leading European supplier of IT services to the hospitality industry. After the proven success of their partnership, formally established through the acquisition of an initial 30% shareholding in September 2003, Amadeus and Optims laid the foundations for an even closer cooperation to deliver leading-edge standards of service to their hospitality clients.
In June, Amadeus consolidated two Hospitality business lines under the leadership of Antoine Medawar, Managing Director, Hospitality and Optims CEO. Mr Medawar has built on the synergies between Amadeus, its network of 75 local distribution companies, Optims and Opodo to deliver the best solutions to hoteliers.
By building on their respective strengths, Amadeus and Optims are able to provide a complete suite of products and services for the distribution and management of hotel rooms, covering all processes from booking to check out. Amadeus and Optims provide hoteliers with Property Management Systems, Central Reservation Systems, Revenue Management Solutions and access to a wide range of distribution channels.
Airlines
Amadeus Altéa Customer Management Solution: In 2005, Amadeus finalised a deal to provide the Star Alliance with a common IT platform. Lufthansa and United will be the first members to use the Amadeus Altéa Customer Management Solution (CMS), a next generation technology platform for reservations, inventory management and departure control, replacing their own legacy IT systems, with expansion to other members planned. Two more airlines, Pulkovo, one of the largest airlines in Russia, and South African Airways, also signed contracts for the Altéa CMS.
British Airways, dba and Finnair migrated their inventory management systems to Amadeus Altéa Inventory (Plan); now over twenty airlines now use the Amadeus system to manage their inventory.
Romanian flag-carrier TAROM, and TACA, the leading Latin American airline, became the latest airlines to outsource their reservations systems to Amadeus in 2005.
Low Cost Carrier Customer Management Solutions: Amadeus launched a portfolio of IT solutions to help low-cost airlines improve operational efficiency while supporting their business growth.
- Results Customer Management Solution (CMS) by Amadeus, was launched in collaboration with Results Reservation Technologies Ltd. in July. This 'off the shelf' solution allows low cost carriers to deploy a quick and simple solution. FlyNordic, Finnair’s low-cost carrier, is the first customer to sign on.
- The Amadeus Pioneer Customer Management Solution (CMS) was launched in October with launch partner Norwegian Air Shuttle. This is a scalable solution for LCCs who want richer functionality and the ability to offer additional services and expand their distribution channels.
Other technology for airlines: Bangkok Airways, CSA Czech Airlines and Aeromexico have adopted Amadeus' revenue integrity technology, taking the total customers for this solution to 29 airlines from four continents. Amadeus Revenue Integrity makes predicting the number of no-shows much more accurate, allowing airlines to fill their planes with paying customers instead of empty seats. Airlines have testified to reducing no-shows from 13% to 4% within days of starting to use the solution.
In June, Amadeus launched Amadeus Code Share, a stand-alone solution which allows airlines to outsource their entire code share messaging to Amadeus. Finnair was the first carrier to implement the solution with 8 active code share agreements, amounting to over 460 flights.
In September, Amadeus launched Amadeus Ticket Changer, an automated ticket reissue tool which enables airlines to recover 160 USD (130 euros) for each ticket they reissue (ATPCO estimates). By using Amadeus Ticket Changer, the time taken to produce new tickets will be reduced from 30 minutes to a few seconds. Air France is the first airline to benefit from Amadeus Ticket Changer.
Electronic ticketing: Amadeus is IATA's preferred supplier to achieve its goal of paperless travel by 2007, and is well on track to complete its part in this key milestone for the industry. By the end of 2005, Amadeus had enabled e-ticketing for 109 airlines and allowed travel agents in 114 markets to issue e-tickets, (14 airlines and 54 markets more than its closest competitor).
In addition to enabling e-ticket distribution, by the end of the year, Amadeus was hosting the e-ticket database for 37 airlines and had enabled interline e-ticketing links with a further 33 through its Electronic Ticket Server (ETS). The Amadeus solution supported the oneworld alliance in its industry-leading e-ticketing implementation: oneworld carriers Aer Lingus, British Airways, Finnair, LAN Chile and Qantas have all outsourced the management and distribution of electronic ticketing to ETS, and e-ticketed interlining is now possible between all oneworld alliance members.
In 2005, Portugalia, LAN Argentina and Malév Hungarian Airlines joined the community of airlines hosted on Amadeus ETS. In total, the solution facilitates 220 e-ticketing interline agreements between airlines worldwide. The solution also enables interline e-ticketing links with a further 33 airlines hosted on external systems.
Online solutions: Amadeus' e-Travel Airline Suite has been instrumental in helping airlines to increase profitability and enhance user experience through the use of e-Merchandise, e-Retail and e-Service solutions.
In 2005, internet bookings processed by Amadeus e-Retail Engine increased by 61% compared with 2004. This represents an overall online booking value of more than EUR 5 billion over the year for the more-than 65 carriers using Amadeus e-Retail Engine.
Additionally, for the second year running, e-Travel won the prestigious "World's Leading Internet Booking Engine Technology Provider" prize, at the World Travel Awards. The repeated recognition for Amadeus comes on the strength of continued, stellar performance of the company's e-Retail Engine, whose reliability metrics have exceeded 99.9%.
During the year, Lufthansa launched its website with e-Merchandise Solution and Amadeus e-Retail Engine. A further ten airlines launched Amadeus e-Merchandise Solution on their websites, including Singapore Airlines, Icelandair and Air France. Amadeus e-Merchandise Solution allows airlines to display a comprehensive choice of best fares, fare conditions, times, and extended date ranges on a single page. Three airlines launched websites powered by Amadeus e-Retail Engine: American Airlines Japan, Etihad and Middle East Airlines.
In December, Amadeus announced data from 8 leading airlines showing that Amadeus e-Merchandise increased online yield by an average of 8% and online revenue by over 30% - representing more than 100 million Euros in additional ticket sales for these airlines.
Corporations
Amadeus e-Travel Management experienced an exceptional year fuelled by a number of significant customer wins, including Kraft Foods, Nestlé, Siemens and Volvo. In Brazil, a dedicated e-Travel unit was set up to support online corporate travel management in Latin America for customers such as CEMEX and Volkswagen Mexico. The unit joined others which have been set up in Australia, Bangkok, Belgium, France, Germany, Italy, the Netherlands, UK, US, Scandinavia and Switzerland.
Amadeus also extended its strategic relationships with global travel management companies, processing 278% more passenger name records via resellers than in 2004. BTI became a certified partner of Amadeus, and now offers the Amadeus e-Travel Management solution to its corporate customers, while the global reseller agreement with TQ3 was extended by 3.5 years.
Opodo
In 2005 Opodo increased its geographic presence from three to nine markets with the acquisition of Quest Travel, Karavel, Eviaggi, Travellink and Vivacances, in addition to the launch of Opodo Spain. Through its strategy of geographic expansion and product diversification, Opodo doubled its gross sales to 1 billion euros. By end of 2007, Opodo intends to reach 2 billion euros in gross sales.
Notes to the editors
Amadeus is the chosen technology partner for providers, sellers, and buyers of travel. The company provides distribution, IT and point-of-sale solutions to help its customers adapt, grow and succeed in the fast-changing travel industry. Customer groups include travel providers (airlines, hotels, car rental companies, railway companies, ferry lines, cruise lines, insurance companies and tour operators), travel sellers (travel agencies) and travel buyers (corporations and travellers). Solutions are grouped in four solution categories – Distribution & Content, Sales & e-Commerce, Business Management and Services & Consulting.
Solutions for travel providers
Amadeus distributes content to around 362,000 points of sale located in over 215 markets worldwide through a range of technology solutions. For airlines Amadeus Altéa Customer Management Solution (CMS) is the first new generation IT platform seen by the airline industry for 30 years, allowing airlines to unlock the full value of each traveller and turn their passengers into customers. More than 150 airlines use Amadeus Altéa Reservation (Sell) as their sales and reservation system – among these are world class airlines including British Airways, Qantas, Finnair, United Airlines and South African Airways who have also contracted Amadeus Altéa Inventory and Amadeus Altéa Departure Control system.
Solutions for travel sellers
Amadeus’ distribution system allows over 75,000 travel agency locations and 11,000 airline offices to make bookings on 500 airlines. It provides access to 61,000 hotel properties and 42 car rental companies serving over 30,000 locations.
Solutions for corporations
Amadeus is the global leader in online travel technology and corporate travel management solutions. It services travel agencies in 90 countries, and powers the websites of over 1,000 corporations and more than 70 airlines and hotels. Amadeus e-Travel Management is an online travel booking solution to help corporations manage their travel policy more efficiently. Both Amadeus and its partners enable corporations to integrate all the elements of their global travel programmes, into one easy-to-use and easy-to-administrate solution. Customers include Altria, Cemex, Daimler Chrysler, Ericsson, Kraft Foods, Nestlé, Oracle, Siemens and Volvo.
Amadeus has central sites in Madrid (corporate headquarters & marketing), Nice (development) and Erding (Operations – data processing centre) and regional offices in Miami, Buenos Aires and Bangkok. At market level, Amadeus maintains customer operations in 75 countries covering more than 215 markets. The company has nearly 6,700 employees worldwide, representing 95 nationalities. Amadeus’ revenue for the year ended 31 December was EUR 2,418.3m.
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