Amadeus sees drop in western Europe agency bookings

Amadeus' latest earnings show that revenues and EBITDA are up, despite a drop in volumes and share from travel agency air bookings in western Europe.

Top-line figures for the six months to end-June18 shows revenue up 4.1% to €2,477.0 million and EBITDA up 8.2% to €1,078.2 million compared with the same period last year.

Distribution

Western Europe, traditionally Amadeus' strongest market, saw a drop in travel agency air bookings, with the total this half coming in at 102.4 million compared with 109.5 million in the same period last time. Amadeus said " the industry decline and the loss of share at some European mid-size online travel agencies" was behind the drop.

Western Europe is still the largest market in volume terms, but the drop this half means western Europe's share of the overall business has dropped by 6.5% to stand at 33.6%.

Taking western Europe out of the picture, Amadeus saw a 9.2% growth in bookings from its other markets. The biggest growth markets were Asia/Pacific at 17.4% and North America at 8.2%.

Amadeus signed 15 new contracts or renewals with airline customers during the second quarter of 2018. It said 75 airlines had contracted Amadeus Fare Families as of the end of June, 145 airlines had signed contracts for Amadeus Airline Ancillary Services, and 205 had contracted Amadeus Passenger Service Systems (Altéa or New Skies).

Russian’s S7 Airlines signed a contract for the full Altéa suite and Royal Jordanian renewed its contract in May for the full Altéa suite.

Amadeus’ Ievel 3 IATA NDC Certification facilitated a new connection with the new Qantas Distribution Platform (QDP). Amadeus also forged two new partnerships for its Amadeus Pricer with Instant Search: Korean online travel agency Hana Tour and Trip.com.

Airline and airports

"Passengers boarded" for Amadeus for the half so far came in at 888.8 million, up by 18% compared with H1 2017.

Amadeus also announced progress on Airport IT. A new contract with Killeen-Fort Hood Regional Airport, Texas, for the Amadeus Extended Airline System Environment (EASE) in May brought to 51 the total number of airports that Amadeus serves in the U.S.

Copenhagen Airport also used the native connectivity of Amadeus’ airports solutions to become the first airport in Europe exchanging data with EUROCONTROL under new iSWIM web services standards. SWIM refers to System Wide Information Management IT infrastructure that allows the real-time exchange of aeronautical, operations, flight and weather information.

New businesses

On the hospitality side of the business, Amadeus said it was progressing with the roll-out of the Guest Reservation System with International Hotels Group, with more than half of the group’s properties now migrated to the platform. Full deployment is expected to be completed in late 2018/early 2019.

While Amadeus’ management acknowledged that they still have a smaller footprint in this sector than rival Sabre, they expressed confidence that they can grow in this sector with the successful IHG deployment helping to open doors.

Amadeus also developed a new booking solution for Swiss Federal Railways (SBB) which gives travelers a quick way to search for routes and costs at-a-glance by entering departure and destination station. It will be used on all of SBB’s sales channels including online, at stations and even through third parties.

Links

Click here for access to a holding page on its Investor Relations site, from where the press release, the results presentation, the management review and the financial statement cn be downloaded.