Amadeus acquires airline hosting firm Navitaire for $830M

Amadeus said today it is acquiring Navitaire, a low-cost hosting platform for airlines that is especially popular with low-cost carriers, from its owner, Accenture, for $830 million.

Navitaire helps a few dozen airlines worldwide pursue various e-commerce and merchandizing options using cloud-based technologies, particularly its New Skies reservation and passenger service system (PSS).

Amadeus’ own main offering to airlines, Altéa suite, has generally only been favored by larger network airlines to date. Navitaire’s services are generally cheaper and offer more direct, faster merchandising control by the airline, the company claims.

The purchase gives Amadeus, one of the few major global distribution systems and travel technology companies, perhaps half of the market share of PSS passenger emplanements worldwide — depending on how you measure it.

Amadeus also gains a special advantage in Asia Pacific, where Navitaire has significant market share.

In contrast, rival China-based global distribution system TravelSky is in the early stages of attempts to advance its NextGen project, a system that relies on older Unisys mainframe technology.

In a statement, Amadeus said that it intends to:

“market and sell the two product portfolios separately and will continue to invest in both platforms, enhancing the services and functionality availability to all types of carriers.”

The move follows rival GDS Sabre’s acquisition of Abacus, an Asian Pacific GDS.

Amadeus now dominates Asia Pacific for airline hosting. It has used its airline hosting deals to generate business for its air GDS system in the past five years, stealing overall share from Sabre.

But Sabre has been putting up a strong fight for airline customers that are going hybrid — mixing between low-cost, a la carte models and more full-service network models.

Accenture has been rumored to be shopping Navitaire for months. An interesting aspect of the deal is this part of the official statement:

“Amadeus and Accenture have formed an alliance… Accenture will be designated as an Amadeus “Strategic Partner” for its Airline IT business for management consulting, technology consulting, systems integration, business process outsourcing and digital services, complementing Amadeus’ existing in-house consulting and digital services. …

Accenture and Amadeus have also agreed to enter into a third agreement under which Accenture will provide Amadeus with infrastructure outsourcing, application and research and development services. Accenture will continue to provide hosting services for current Navitaire clients as well as Amadeus’s future clients that purchase the Navitaire solution.”

Share on FacebookTweet about this on TwitterShare on LinkedInEmail to someone
 
 
Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.

 

Comments

Your email address will not be published. Required fields are marked *

  1. Roland Heller

    830 million USD equals to at least 55 million net profit to be made with the navitaire product line just to pay for the deal (over 15 years). that’s a lot of money. besides that – what is the growth potential of navitaire – they have lost some deals recently (more than won) and there’s almost zero growth as navitaire already serves most of the LCCs. only way to grow is going after the small carriers which I don’t think makes sense due to the high cost compared to systems that cater for that market. Only gain I can see is switching Navitaire’s interline and e-ticket dependency from 1P to 1A and cross-sharing of apps (RevAcct, RevMgt). My prediction: NewSkies will disappear over time as more LCCs will adapt the Altea platform – coz that’s Amadeus core platform. For me this is more of a ‘killing your strongest competitor’ – if you can’t compete then buy them.

     
  2. Colt Cooper

    I have to think that this deal was in the works since before Navitaire’s president went over as a VP: http://www.amadeus.com/web/amadeus/en_1A-corporate/Amadeus-Home/News-and-events/News/2013_10_09_John-Dabkowski-to-join-Amadeus-/1319560217161-Page-AMAD_DetailPpal?assetid=1319570866632&assettype=PressRelease_C

    Both systems serve a different niche market. It should be interesting to see if there are any technology stack changes one way or the other as a result of this acquisition.

     
  3. Timothy O'Neil-Dunne

    Interestingly for those who follow this sort of thing… Accenture’s large airline customers are not Navitaure users but strangely are mostly Amadeus users. So there is synergy in here.

    One key question that should be asked is whether the (now) large share of the airline hosting market that Amadeus commands constitutes a market dominance in a critical area of Travel Distribution. This is likely to trigger investigations on either side of the Atlantic.

     
    • Rob Schorn

      Agree this a key question but this acquisition doesn’t change things in a material way in the Americas so would be surprised if there is much interest expressed by US authorities and it would be surprising if Amadeus is subject to anything more than a cursory review by European authorities – after all it’s a European success story! Definitely some concerning dominance in Asia but no coherent regulatory oversight to keep it in check so that will probably also prove to be a bit of a non-issue. Interesting times…

       
    • kevin@callisto.uk.com

      100% agree interesting and some more. I would love to be a fly on the wall in Travelport and Sabre right now as its shaken the distribution tree and if there was some investigations to be done wouldn’t be at all surprised if either of them are not stoking the fire..

       
      • Roland Heller

        Not sure if it affects travelport as much as it affects Sabre. Travelport has no CRS business any longer except for Worldspan and some e-tix services. However, it will be interesting to see how SITA is going to address that – their new platform is still in the making and the old platform can’t compete against Altea and Navitaire – unless cross-subsidized. What it is interesting to see here is the conclusion by Amadeus that they couldn’t have done it themselves – not even for 830mio …. sort of a defeat really.

         
 
 

Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel