Amadeus is reducing costs and capital expenditure by €300 million due to the impact of COVID-19 on the airline sector.
In a statement to investors issued on Monday, the company says it had “adopted a set of measures to protect its liquidity.”
The company has been hit by a "combination of trip cancellations and country-specific restrictions on international flights has had a severe impact on the global airline industry and as a result, on our volumes, both bookings and passengers boarded," it says.
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In addition to the cost-cutting exercise, Amadeus says it is close to securing €1 billion in liquidity, which is on top of its current €1 billion “revolving credit facility” and €660 million in cash reserves.
The company is also cancelling a dividend payment of €320 million that had been scheduled for the general shareholders’ meeting in June.
The statement says that Amadeus will review the €300 million reduction program on a quarter-by-quarter basis.
It goes on to provide details of the company’s current liquidity level, including a €127 million loan from the European Investment Bank, which it says gives it “ample headroom.”
Financial obligations for the company this year include a €500 million bond that matures in October and €730 million for a European commercial credit facility.
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The company says: "Our aim is to be well prepared to face a tough business context. The initial recovery China is experiencing today may set a reference for the future of other regions in the world.
“We will closely monitor this evolution and carefully manage our cash position over the next twelve months.”
Notes to analysts from Credit Suisse on the Amadeus announcement indicate that Europe represents about 40% of Amadeus’ business volumes, with Asia Pacific at about 25% and North America accounting for 15%.
The financial powerhouse also expresses disappointment at the need by Amadeus to “rein in investment in R&D.”
Last week rival GDS Sabre announced $200 million in cuts.