Amadeus to buy Accenture's Navitaire - First View Analysis
Amadeus' bid for Accenture's Navitaire has the potential to change the PSS market structure for some time. Most customers are unlikely to oppose the deal, but a few commercially savvy airlines will seek to lower cost and improve terms from the acquisition. The deal presents some regulatory risk specifically in Europe, although Amadeus will have undoubtedly taken advice that the markets are quite different.
02/07/2015
Amadeus to buy Accenture's Navitaire
Amadeus announced its intention to acquire Navitaire and enter into a strategic alliance with Accenture. Amadeus will continue to offer and support the Navitaire solution to low-cost carriers. This transaction is expected to close in the fourth quarter of 2015 subject to related approvals.
01/07/2015
Amadeus' Response on the effect of Lufthansa's Distribution Strategy
Amadeus responded to Lufthansa's announcement to introduce a surcharge of 16 Euros per ticket for tickets booked using a global distribution system. The response suggests there would be no financial impact. This suggests any decreases in volume will be compensated by an increase in the charges. It also implies that the ratio of Amadeus' bookings per ticket is high at about 2.7. T2RL believe this indicates that on average Lufthansa is selling complex connecting itineraries through the GDS rather than simple point to point itineraries. It also suggests that the average booking fees have risen by about 2.5-3.0% since 2008 as the surcharge rate at that time was published at 4.90 Euros.
11/06/2015
Lufthansa moves on Distribution Cost
In response to Lufthansa's announcement with respect to passing on charges in the GDS channel from 1 September 2015, T2RL have developed a First View perspective and insight for clients.
03/06/2015
Lufthansa Group Carriers to pass GDS fees on to Buyers in the GDS Channel
From 1 September, 2015 the Lufthansa Group, specifically Lufthansa, Austrian Airlines, Brussels Airlines and Swiss will surcharge 16 Euros for each ticket issued through any GDS. Direct channels will not carry the surcharge. Lufthansa are making all fares available without surcharge on a number of websites and direct channels. This is clearly a push to make GDS charging transparent. This follows some of the low-cost carriers. Clearly both PSS and GDS agreements must have been in place for this to happen. Lufthansa's actions will definitely encourage other airlines to seek the right to surcharge and make the GDS booking costs transparent to buyers. Whilst T2RL believe Lufthansa Group carriers will not suffer share loss in their domestic markets, sales in regional or distant markets may require fare adjustments to remain competitive and compelling. Lufthansa will seek to educate the travellers that the lowest price for tickets will be their own websites.
02/06/2015
Sabre to buy Abacus
Sabre plan to acquire the remaining shares in Abacus International. Assuming regulatory approval is granted, Sabre's management will control the setting of booking fees and pricing as soon as the transaction is concluded. The sale also appears to secure the Abacus shareholders participation with the mention of new long-term distribution agreements for the 11 owners of Abacus.
14/05/2015
Sabre Wins LATAM's TAM and Displaces Amadeus
LATAM announced their decision to select Sabre as their single PSS platform on 05 May 2015. This is a big deal for Sabre as it secures their inventory footprint in Latin America with the largest regional carrier. Securing inventory is a critical piece of the puzzle for any PSS/GDS supplier and Sabre will be the dominant PSS provider in the region following cutover to Sabre. Combined with COPA's recent win, Sabre now have a solid, long term IT platform in Latin America. Execution will be challenging, however the current economic climate provides urgency to get this work done.
08/05/2015
Sabre signs LATAM
Sabre have succeeded in displacing Amadeus at LATAM Airline Group in a bid to simplify and unify the reservations platform. Sabre's win comes at the direct expense of Amadeus.
05/05/2015
Flydubai selects Radixx for PSS
Flydubai have finalised their selection process and opted for the right to develop their own solution based on Radixx's source code. The 7.25 million passenger carrier has been a Radixx customer for a number of years. By buying a source code licence they will be able to meet their own requirements for functionality at their own pace.
20/04/2015
Radixx and Flydubai Secure their Futures
T2RL consider the Flydubai / Radixx news and agreement as important for airline buyers of PSS. The source code licence option is unusual for such a small carrier. The last major source code deal was Delta Airlines with Travelport. The deal is therefore worth commentary from T2RL's analyst community.
20/04/2015
Distribution Heatmap 2015
T2RL's research team met in Whistler, Canada from 13th. to 17th. April 2015 to define the key issues facing airline distribution executives for the coming year. The GDS' are thriving and like any business they continue to exert pricing power when they have the opportunity to do so. LCC's are participating in the traditional distribution architectures and are well placed to take advantage of the infrastructure developed and tuned by the traditional carriers and their vendors. Market dynamics are challenging with market concentration and consumers access to technology.
19/04/2015
Guestlogix takeover OpenJaw - aiming for one stop shop for ancillaries
Guestlogix has
bought out the ancillary packaging software company, OpenJaw for $41.2 million in a
deal that will add more heat to the airline merchandising market.
09/02/2015
Japan Airlines selects Amadeus
Finally Japan Airlines and Amadeus announced their agreement for supply of passenger servicing systems for JAL's international and domestic business.
31/07/2014
Amadeus wins Japan Airlines International and Domestic Passenger Services Business
Amadeus have consolidated their position in Asia as the dominant supplier of passenger services technology by announcing a long-term agreement with Japan Airlines.
31/07/2014
Emirates Breaks with the PSS Market Trend, First or Last?
Emirates have made the decision not to move ahead with Amadeus' PSS solution after a long and expensive process for all parties. This is not as much of a blow for Amadeus as it is for the outdated marketing automation structures.
07/07/2014
Travelport to IPO
Undoubtedly encouraged by Sabre's recent IPO success and Amadeus' current valuation, Travelport's owners have made the decision to sell.
04/06/2014
Delta Airlines buys Travelport out to control their destiny for PSS
Delta Airlines have agreed to buy back the intellectual property for their passenger servicing systems (PSS) from Travelport and take on some 175 staff that work on the Deltamatic system transferred to Travelport (Worldspan) some years ago. Delta, like a small number of other airlines are signalling their intention to reverse the market trend for purchase of market based community solutions. Delta are unique however with over 168 million passengers boarded in 2013 including franchise carrier volumes.
22/05/2014
Sabre signs Air Berlin for migration by the end of 2016.
Just a few days after the announcement of Southwest's decision to choose Amadeus as their PSS, Air Berlin have announced that they will be migrating from Amadeus to Sabre to conclude in 2016. This is a big win for Sabre on Amadeus' home turf and a validation of their strategy to support and work closely with Etihad.
07/05/2014
Southwest to move to Amadeus for their domestic PSS, following implementation of the international business acquired from Air Tran
Amadeus will provide Southwest's domestic PSS after a competitive tussle with Sabre. Amadeus were clearly favourites having won the Air Tran international business following a successful migration of the first batch of flights. This is a real coup for Amadeus in Sabre's backyard
05/05/2014
Sabre IPO expected in April with valuation of $4.9-$5.0 Billion.
Sabre's IPO looks set for launch around 16 April 2014 based on 2013 financials. Silverlake and Texas Pacific Group will reduce their shareholding and Sabre will pay down a proportion of their debt.
08/04/2014
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