Amadeus has issued a Management Review as part of its 2015 Q1 results released today, with the document outlining its "key ongoing R&D investments".
- "migration development work in relation to Altéa implementations scheduled in 2015, such as All Nippon Airways (the international passengers business) and Thomas Cook Group"
- "solutions [for airlines] related to availability, mobile functionality and XML development in compliance with NDC standards"
- "increased resources dedicated to our new initiatives (hotel, rail, airport IT, payments and travel intelligence)"
- "regionalisation investment, with the aim to better adapt part of our product portfolio to specific regions"
"Payments" is a fairly fresh areas of interest for Amadeus. The review refers to "working with industry partners" while the results referencing its tie-up
with global payments provider Elavon
Elsewhere, its hotel IT arm got a massive shot in the arm when IHG signed up for Amadeus' community reservation scheme; airport IT has been winning customers (Munich Airport) and buying scale (Air IT); the IT and distribution platform for BeNe Rail remains a work in progress.
Overall, its R&D spend in the first three months of 2015 was €145.4 million ($164.7 million), or 14.7% of the overall revenues which came in at €898 million ($1.1 billion).
These new initiatives are all long-term plays for Amadeus. In the here and now, its core distribution and airline IT businesses continue to grow. It has increased its global market share of travel agency air bookings, with 139.9m bookings giving it a 42.3% share, up from 39.9% in the same quarter last year.
The R&D in regionalisation mentioned above appears to be working in Asia Pacific. The region now accounts for 17.8% of travel agency bookings, up nearly 50%.
Airline IT has also had a strong quarter in APAC, with comparables boosted by Korean Air moving onto Altea last year. In the quarter Amadeus also signed up China Airlines as its first ever Chinese-language customer.
APAC accounted for 47 million passenger boardings out of a global total of 165.3 million, equivalent to 28.5% of the total.
CEO Luis Maroto said in a statement that "our geographical diversification beyond Western Europe has improved significantly, with the weighting of bookings and passenger boardings from Western Europe now accounting for 40.7% and 40.5% respectively."
Western Europe is still growing but is a smaller proportion of Amadeus' overall business. However, air remains dominant in the distribution piece, with non-air hardly getting a mention. The presentation shows that non-air did grow by more than 10% in the quarter reaching 16.5 million bookings, with rail an important source of the growth.
Click here to access the press release, presentation and management review.