Amadeus IT Group
Headquarters (Madrid, Spain)
|Type||Sociedad Anónima (BMAD: AMS)|
|Key people||José Antonio Tazón (Chairman), Luis Maroto (President and CEO)|
|Services||Provision of computer reservations systems; IT systems for the travel industry; online travel agency|
|Revenue||€3.103 billion (2013)|
|Operating income||€888.0 million (2013)|
|Net income||€619.5 million (2013)|
|Total assets||€5.427 billion (end 2013)|
|Total equity||€1,840.1 million (end 2013)|
|Employees||10,502 (FTE, end 2013)|
The company is structured around two areas: its global distribution system and its IT Solutions business area. Acting as an international network, Amadeus provides search, pricing, booking, ticketing and other processing services in real-time to travel providers and travel agencies through its Amadeus CRS distribution business area. Through its IT Solutions business area, it also offers travel companies software systems which automate processes such as reservations, inventory management and departure control.
The group, which processed 850 million billable travel transactions in 2010, services customers including airlines, hotels, tour operators, insurers, car rental and railway companies, ferry and cruise lines, travel agencies and individual travellers directly.
The parent company of Amadeus IT Group, holding over 99.7% of the firm, is Amadeus IT Holding S.A. It is listed on the Spanish stock exchanges as of 29 April 2010 and trades under the symbol AMS. For the year ended 31 December 2012, the company reported revenues of €2.910 billion and EBITDA of €1.108 billion.
Amadeus has central sites in Madrid, Spain (corporate headquarters and marketing), Sophia Antipolis, France (product development), Erding, Germany (data processing centre) and Bangalore, India (software lab) as well as regional offices in Bangkok, Buenos Aires, Dubai, Miami and Sydney. At market level, Amadeus maintains customer operations through 173 local Amadeus Commercial Organisations (ACOs) covering 195 countries. The Amadeus group employs 10,170 employees worldwide.
Amadeus was originally created as a neutral global distribution system (GDS) by Air France, Iberia, Lufthansa and SAS in 1987 in order to connect providers' content with travel agencies and consumers in real time. The creation of Amadeus was intended to offer a European alternative to Sabre, the American GDS. The first Amadeus system was built from core reservation system code coming from System One, an American GDS that competed with Sabre but went bankrupt, and a copy of the Air France pricing engine. These systems were respectively running under IBM TPF and Unisys. At the beginning of Amadeus, the Amadeus systems were functionally dedicated to airline reservation and centered on the PNR (Passenger Name Record), the passenger's travel file. Throughout the years, the PNR was opened up to additional travel industries (hotels, rail, cars, cruises, ferries, insurance, etc.).
Although established initially as a private partnership, Amadeus went public in October 1999, becoming listed on the Paris, Frankfurt and Madrid stock exchanges. Progressively and in line with industry evolution, Amadeus diversified its operations by focusing on information technologies (IT) to deliver services spanning beyond sales and reservation functionalities, centred on streamlining the operational and distribution requirements of its customer base.
In 2000, Amadeus received an ISO 9001:2000 quality certification – the first GDS company to do so. Since 2004, the company has invested €1 billion in R&D and Amadeus's technology has increasingly embraced open systems which provide clients with more flexibility and features, as well as other benefits. Today, 85% of its software portfolio is open system based. In 2005, Amadeus was delisted from the Paris, Frankfurt and Madrid stock exchanges when BC Partners and Cinven bought their stake from three of the four founding airlines and the rest of the capital floated from institutional and minority shareholders. The transition from distribution system to technology provider was reflected by the change in its corporate name in 2006, when the company name was changed to Amadeus IT Group. In 2009, Amadeus invested about €257 million in R&D. Amadeus is again listed on the Spanish Stock Exchanges as of 29 April 2010 (AMS). Throughout the years, Amadeus acquired:
- SMART AB, a travel distribution company in Northern Europe
- Vacation.com, the largest US marketing network for leisure travel
- E-Travel, Inc., a supplier of hosted technology products for corporate travel
- Opodo, a European travel website which it sold on February 2011 for €450 million
- Airline Automation (AAI), a robotic PNR processing company, in 2006
- TravelTainment, a leisure content provider
- Optims, a European hotel software company
- Onerail, a rail IT software supplier
Amadeus has its own data centre in Erding, Germany. In 2010, the Erding complex processed ½ billion transactions per day, and handled, on average, 9,000 user data queries per second, with an system response time of less than 3 milliseconds and an average system uptime of 99.99%.
Amadeus’ global operations comprise not only the main site in Erding, Germany, but also two strategic operation centres in Miami, United States and Sydney, Australia, and local competency centres in Germany, Thailand, Poland, Colombia, Ukraine and the United Kingdom.
Overview of the company's business and activities
Amadeus CRS is the largest GDS provider in the worldwide travel and tourism industry, with an estimated market share of 37% in 2009. This position permits Amadeus to offer distribution reach for global and local travel content. As of December 2010, over 90,000 travel agencies worldwide use the Amadeus system and 58,000 airline sales offices use it as their internal sales and reservations system. Amadeus gives access to bookable content from 435 airlines (including 60 low cost carriers), 29 car rental companies (representing 36,000 car rental locations), 51 cruise lines and ferry operators, 280 hotel chains and 87,000 hotels, 200 tour operators, 103 rail operators and 116 travel insurance companies.
The principal service of this business area is the Amadeus Altéa Customer Management System (CMS), a software suite which addresses airlines' sales and reservations, inventory management and departure control.
Unlike the carriers’ legacy IT systems, the Altéa platform is based on a common technical infrastructure and software. With Altéa, airlines outsource their IT operations onto a community platform which allows them to share information with both airline alliance and code-share partners.
The Altéa suite presently consists of four main modules: Altéa Reservation, providing booking, pricing and ticketing management through a single interface; Altéa Inventory, providing schedule and seat capacity management on a flight-by-flight basis; Altéa Departure Control, a departure control system software package; and Altéa e-commerce, a software suite for airline e-commerce sales and support.
In 2009, the number of passengers boarded by airlines using Amadeus Altéa was 238 million. Amadeus is extending its IT solutions business with the ongoing development of similar systems for rail companies, hotel chains, airport operators and ground handling companies.
Business model and other business lines
The business model of Amadeus is booking fee or transaction based, which means that a fee is taken for each confirmed net booking made in the Amadeus CRS. Income from these fees is used to finance the distribution network based on incentives and the Amadeus system evolutions.
In late 1990s, a business division specialized in e-commerce was created. Its purpose was to complement the Amadeus software product offer to the airlines by developing a complete web based booking solution. It proposes a high level of integration with Amadeus central reservation system.
In 2000, Amadeus was awarded the development of two new operational applications for British Airways and Qantas Airways : the inventory management and the departure control systems. These products were outside of the core expertise domain of Amadeus and were built with the expertise of the airlines.
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