Amadeus knows how to win a victory, but does it know how to exploit it?
In July 2015, the Madrid-based travel technology giant said it would acquire Navitaire, a low-cost hosting platform for airlines, for $830 million, from Accenture, the operations specialist.
The deal was a victory in the sense that it plugged a gap in its customer base. Navitaire has a few dozen hybrid and low-cost carriers as clients, a segment that Amadeus has struggled to court.
The deal gives Amadeus perhaps half of the global market share of passenger emplanements among passenger service systems (PSS), depending on which measures you use.
But can Amadeus keep that customer base happy after the acquisition closes (which is expected to happen within a few months' time)?
On Friday, Amadeus sent a message to its airline partners that revealed some of its plans for Navitaire and attempted to reassure clients that things will continue as before. Tnooz obtained a copy.
The message from Julia Sattel, senior vice president, Airline IT, reaffirmed that Amadeus will continue to "retain the brand, solution, and the related/integrated components" of Navitaire's New Skies reservation system.
"Navitaire customers will maintain the flexibility regarding their direct connect APIs (whether or not following the NDC standards) and remain free to ‘mix and match’ by adding components such as the eCommerce booking engine or revenue accounting products from third party vendors other than Navitaire or Amadeus, depending on their individual preferences.
Navitaire’s commitment towards the development and implementation of NDC will continue and will be honoured."
Amadeus said that "over the next few years" it expects it will increase investment in Navitaire's New Skies to bring that "closer to the much higher Amadeus investment levels."
The company said it would pursue New Skies product enhancements while "also retaining the Navitaire competitive pricing."
Amadeus also reassured airlines that Amadeus will not require Navitaire PSS customers to enter into a global distribution system (GDS) contract with it. That's an important point for low-cost carriers, many of whom prefer to avoid GDS ties.
Navitaire has said its customers sell more than 60% of their tickets direct via the Internet, on average.
Many of those customers want to boost their ancillary sales, which are more profitable than their core ticket sales. Navitaire has offered an ancillary revenue system to help airlines with that goal.
Details on the fate of that and other Navitaire offerings, like its add-on Professional Services, weren't mentioned in the message.
There was no comment about the cost of additional services, such as ones that old owner Accenture offered. For example, Accenture Airline IT management consulting, technology consulting, systems integration, business process outsourcing and digital services will still be offered, post-deal.
But, to be fair, the message appeared to be intended to be brief, and it's still early days.
The temptation for an acquiring company to interfere can be great. Keeping its new customers happy will be a key to Amadeus leveraging maximum value from its acquisition.
EARLIER: Amadeus acquires airline hosting firm Navitaire for $830M