Amadeus’ 2008 business results show resilience in difficult trading environment

Bangkok, Thailand (Asia Pacific), 29 May 2009: Amadeus, a global leader in technology and distribution solutions for the travel and tourism industry, today announced business results for the twelve months ending 31 December 2008. 

 

Amadeus’ global revenue grew by 2.2% compared with 2007, to EUR 2,861.4m[1]. Total travel bookings fell by 2.1% year-on-year to 526.6m but travel agency air bookings grew slightly, by 0.6%, to 364.2m. This was achieved in a declining market largely thanks to a 1.7 percentage point gain in market share; Amadeus retains the number one position in travel agency air bookings made through a GDS in 2008 with a market share of 35.6%.

 

Amadeus’ overall performance was also reflected in Asia Pacific. Amadeus Asia Pacific continued to grow its market share by 0.9 percentage points to reach 30.8%. Due to the difficult economic climate, travel bookings at Amadeus Asia Pacific contracted by 4.3% year-on-year, but this decrease was comparatively less than that of the Asia Pacific GDS market as a whole, which fell by 7.1%.

 

From today, Amadeus will report the number of passengers carried by airlines using at least two modules of Amadeus’ Altéa Customer Management Solution (CMS). This is an indicator of the progress of Amadeus' airline IT business and the most significant indicator of the diversification of Amadeus’ revenue streams. In 2008, 193 million passengers boarded airlines using Amadeus’ flagship IT solution, an increase of 55.9% over 2007, when 123.8 million passengers boarded.

 

David V. Jones, President and Chief Executive Officer, comments: “Amadeus’ business showed a reassuring degree of resilience against the extraordinary financial and trading environment of the second half of last year. 2008 was very much a year of two halves: a very strong first-half performance combined with the well-documented collapse in demand in the last six months meant we ended the year about level with 2007.

 

In our global travel distribution services business, we gained 1.7 percentage points in market share which gave some protection against the drop in demand. Looking at how 2009 is developing, travel agencies made 9.1% fewer air bookings through Amadeus in the first quarter of 2009 than Q1 2008. This is slightly better than the GDS market as a whole which, we estimate, fell by 13.2% over the same period.

 

To give the marketplace an indication of Amadeus’ diversification into airline IT, we have begun to report a new business performance indicator: passengers boarded, which is described above. The growth in this indicator is driven by the migration of new customers to Amadeus Altéa CMS; looking ahead,we have a pipeline of new customers who have signed contracts for the IT platform but who have not yet migrated, so we would expect passengers boarded to continue to grow through the course of this year, despite the continuing poor trading environment. Indeed, the efficiency savings and variable cost structure of Altéa CMS are especially appropriate in the current environment.

 

We will concentrate on growing our market share and continuing the evolution of our diversified business lines as we ride out the worst effects of the global recession and strengthen our position to take advantage of an eventual recovery. Nevertheless, there is still a long way to go before we can credibly start talking about recovery.”

 

 

Business Highlights

 

Travel agencies

Amadeus started 2008 with a long-term, pan-European agreement with the Nordic region's largest online travel agency and parent company of Seat24 and SRG Online, European Travel Interactive (eTRAVELi). Amadeus provides eTRAVELi with key travel content and fare-search technology.

 

In September 2008, Amadeus announced an agreement to supply Latin America’s largest travel agency group, L’AlianXa Travel Network, with mid-office technology to support the group’s network of 90 travel agencies with 270 points of sale in 99 cities and 18 countries in the region.

 

In Asia, Amadeus signed new agreements with Wipro Travel Services and Kalifa Travels (both based in India), Holiday Travel & Tours in Singapore, Nan Hwa Travel in Hong Kong, and First Metro Travel in the Philippines.           

 

In North America, Amadeus signed agreements with HTH Worldwide and Starcite to enable agents in the US and Canada to, respectively, provide their customers with global health and safety information relating to their destinations and to offer integrated online travel and meeting management services to corporations.

 

Moving to Europe, 2008 was a very strong year for Amadeus’ business in the UK market where the opportunity for growth is still significant. By September, the company had announced 35 new travel agency customers in the market and later anounced the renewal of a technology agreement with Ian Allen Travel.

 

Also in 2008, Amadeus launched Amadeus e-Support Centre, an online support tool for travel agents to browse support information, resolve problems and log a case to the Amadeus Help Desk. The online resource is currently in use in France, Australia, Malaysia, the Philippines and Hong Kong.

 

In leisure travel, Amadeus created a new unit to provide tools for international leisure distribution called TravelTainment - The Amadeus Leisure Group. The unit brings together three Amadeus leisure technology businesses: TravelTainment, Amadeus Tours, and the product management and development for TOMA, a tour package distribution solution.

 

Amadeus Asia Pacific also launched the SMS Solution, an industry-first web-based tool that allows travel agents to send vital travel information to customers conveniently via SMS, wherever they are in the world. The solution was developed by the region’s Innovation Team, which focuses on developing specialised technologies for Asia Pacific, in Asia Pacific. The SMS Solution has since been successfully implemented in Australia, Hong Kong, Malaysia, Philippines and Thailand, allowing agents in those countries to harness the trend of technology convergence on mobile devices.

 

Airline IT

In 2008, the final piece of the Amadeus Altéa Customer Management Solution (CMS) was smoothly project-managed into place with the migration of Qantas to the new check-in and flight boarding system, Altéa Departure Control – Customer. Qantas is the first airline to become operational on the complete Altéa platform. Also in 2008, the first four airlines cut over to the inventory management module of the Star Alliance Common IT Platform (CITP); Lufthansa was the first followed by Austrian Airlines, Adria Airways and Croatia Airlines.

 

In total, Amadeus migrated 13 airlines to Altéa CMS in 2008 and signed contracts with a further 14 new airlines. Singapore Airlines selected Amadeus Altéa CMS to replace its existing passenger service systems and TAP Portugal, a member of the Star Alliance network, chose the Star Alliance Common IT Platform (CITP) to replace its current reservations, inventory, ticketing and check-in systems. Amadeus also extended its relationship with British Airways for a further 10 years, until 2017. So far in 2009, the SAS Group, Royal Air Maroc, Tunisair and Air Austral have signed contracts for the new platform.  

 

In e-commerce, Amadeus’ online booking technology helped generate Euros 9.1 billion for airlines in 2008; global bookings made using Amadeus e-commerce technology increased by 31% in the year, while in Asia Pacific, online bookings grew by 32%. Amadeus technology supports more than 6 million unique visitors to airlines' websites every day and in 2008 delivered over 2.85 billion page views with 99.9% reliability. New implementations in 2008 include Air China, El Al, Hainan Airways, US Airways and V-Australia. In all, half of the world's top 50 airlines have selected Amadeus e-commerce solutions.

 

Airline Distribution

Early in 2008, Amadeus launched a programme to transform the company’s global distribution system to enable airlines to act like true retailers through the travel agency channel. Amadeus Airline Retailing Platform, which is being rolled out over two years, comprises merchandising and revenue integrity functionality and an improved management interface. In July, Amadeus implemented merchandising functionality for Finnair which improves their ability to communicate their product and special offers in a visually impactful manner to travel agents. In November, Amadeus launched Automated Ticketing Limits with Air France, which, by prompting travel agents about ticketing time limits during the booking process, increases operational efficiency, improves customer service and increases revenue for the airline.

 

In June 2008 Amadeus announced a major agreement to become the exclusive home market distribution partner for Air Algérie, Afriqiyah Airways, EgyptAir, Etihad Airways, Kuwait Airways, Libyan Airlines, Qatar Airways, Saudi Arabian Airlines, Sudan Airways, Syrian Arab Airlines, Tunisair and Yemen Airways under an umbrella agreement with the Arab Air Carriers Organisation (AACO). A month later, Amadeus added Royal Air Maroc with a similar agreement.

 

In 2008, Amadeus launched a three-year full content programme in Europe, which 44 airlines have signed; currently, 131 airlines have signed content guarantee agreements with Amadeus. During 2008, transavia.com was implemented in Amadeus Ticketless Access solution, bringing the total number of low-cost carriers bookable in Amadeus to 56.

 

Hotels

In 2008 the number of hotels available for travel agencies to book on behalf of their customers increased to 80,000. More than 50,000 of these hotels, accounting for over 75% of bookings, guarantee their Best Available Rate through Amadeus.

 

Overall hotel bookings made through the Amadeus GDS during 2008 rose by 4.4% compared with 2007, generating more than 2.2 billion Euros for hotels using the system. 60 hotel brands have signed up to Amadeus’ commission management solution, Worldwide Commission Manager, which launched with travel agencies in France in 2008.

 

In 2008, Amadeus continued to adopt Open Travel Alliance XML direct connect technology for it hotel partners. This is a common language for travel-related terminology and a mechanism for promoting the exchange of information across all travel industry segments. With Direct Connect, hotels are able to add content, implement new features and enhancements as well as develop new offers more quickly. Currently Accor, Carlson and Derbysoft hotels are connected to Amadeus using this technology.

 

Amadeus completed the largest implementation of its Revenue Management Solution to date in 2008, with the installation of the system on 556 Premier Inn hotels. The UK’s largest hotel chain increases the number of properties which use the system by nearly 50%. Amadeus also entered the Indian hotel IT market by implementing its advanced Property Management system for Golden Tulip Jaipur, with a further 20 Golden Tulip properties in India planned. Amadeus’ PMS solutions are already implemented in more than 6,700 properties around the globe

 

Travel services

In June 2008, Amadeus announced a major milestone in the diversification of its range of technology solutions for customers in the travel industry, with the acquisition of Onerail. The acquisition allows Amadeus to offer off the shelf, next generation IT and distribution technology solutions to help rail companies operate with the flexibility they need to compete in the 21^st century. 

 

Amadeus also implemented Heathrow Express and Arlanda Express schedules and fares on the travel agency air display. The implementation expands the reach of high-speed rail-air services and enables travel agencies to offer a truly seamless intermodal travel experience to their customers.

 

Amadeus became the first GDS to implement greener, more efficient e-vouchers for 100% of its travel agency car rental bookings with the complete withdrawal of paper rental vouchers in 2008. Amadeus Cars offers 24 global car rental companies in 36,000 rental locations in more than 250 destinations.

 

Amadeus continues to offer the widest range of cruise lines of any comparable distribution company and Amadeus Cruise bookings grew by 19.6% in 2008 compared with 2007.

 

Corporations

Amadeus e-Travel Management – the online travel management solution for business travellers – continues to grow strongly. Revenue grew by 44% worldwide in 2008 and bookings made by travellers managed through TMC partners grew by 60%. In October Amadeus added FCm Travel Solutions to the growing list of Amadeus e-Travel Management global resellers.

 

Amadeus launched a number of upgrades to the solution during the course of the year, including new airline content, features to allow the exchange of unused tickets, and functions to make it easier for travellers with special needs to make their travel arrangements.

 

Amadeus announced an expanded partnership with SAP AG, the world's leading provider of business software, to market an enhanced travel management and expense solution for corporations.

 

Group Activities

As part of an on-going initiative to place development expertise and decision-making as close to its customers as possible, Amadeus opened regional centres in Chicago and Dubai.

 

At the beginning of the year, Amadeus sold its 50% stake in Rumbo, an online travel agency operating in Spain, Portugal and Latin America.