Amadeus announced year-on-year financial and operating results for the full year of 2014 ended December 31, 2014 with adjusted profit for the period, including M&A activities, growing 9.9% to €681.1 million.
This was backed by an increase in revenue of 10.1%, to €3,417.7 million, and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) growth of 9.9%, to €1,306.0 million.
In the Distribution business, total air travel agency bookings increased 5.2% to 466.5 million, while the IT Solutions business saw Passengers Boarded jumped 12.9%, to 695.4 million.
Luis Maroto: Asia Pacific continues to be main driver of growth for IT Solution. (Image credit: Amadeus)
Luis Maroto, president & CEO of Amadeus, said the company’s core business continued to grow with market share gains in Distribution especially in North America and Asia Pacific.
The company’s long-term commitment to lo -cost and hybrid carriers also gained further momentum, with a 16% booking increase year-on-year and a landmark partnership with Ryanair.
Maroto added: “Asia Pacific continued to be the main driver of growth for IT Solutions, supported by the migration of Korean Air later in the year. This will expand further with the scheduled migration of a number of Asian carriers in the coming years, such as Japan Airlines and the international passengers business of All Nippon Airways. Our continued efforts and focus on North America led to the groundbreaking Southwest Airlines domestic contract. We now expect annual contracted PBs of close to one billionby 2017, an increase of 44% over 2014.
“Furthermore, our recent strategic acquisitions – Newmarket International in the hotel IT space, UFIS in the airport IT business and i:FAO in the corporate travel IT segment – are already contributing positively.
“I am confident that in 2015, our people, our technology and the strength and resilience of our business model will allow us to make further progress and we expect continued growth for our core businesses.”
Business highlights for FY 2014
Distribution
Revenue increased 5.9% to €2,455.1 million (including M&A activity)
Air travel agency bookings rose 5.2%, to 466.5 million
Market share expanded by 0.7 percentage points, reaching 40.7%
Amadeus continued to outperform the industry in 2014, where total air bookings through travel agencies grew by 3.2% during last year. Air travel agency bookings through the Amadeus system increased by 5.2%, which led to further gains in market share: as of December 31, 2014 our global market share was 40.7%, 0.7 p.p. higher than that of 2013. Both Asia and Pacific and North America were the regions with highest volume increase for Amadeus, both driven by industry growth and market share gains. In particular, the migration of travel agencies from Topas to Amadeus platform at the end of the third quarter of 2014 supported our booking increase in that region.’
A key highlight of the year was reaching a breakthrough agreement with Ryanair, which brought a wide range of its fares and full ancillary services to Amadeus’ travel agency subscribers for the first time in over a decade. The agreement included Ryanair’s new Business Plus fares, offering business and corporate travellers a tailored package.
Additionally, distribution agreements with 15 new hybrid and low cost airlines were also signed during the year, and to date 79 low-cost carriers have become Amadeus distribution partners. Bookings from travel agencies on low-cost carriers were up by 16% year-on-year during 2014.
Sales of merchandising solutions from Amadeus maintained momentum with 31 new airlines signing-up for the Amadeus Airline Ancillary Services solution during 2014. These included Etihad Airways, when it became the first airline in the United Arab Emirates to deploy the solution, and United Airlines, marking the industry’s first NDC-XML solution in the travel agency channel in North America.
Fourteen airlines also signed agreements for the Amadeus Fare Family Solution, taking the total to 15. Currently a total of 110 airlines have contracts for the Amadeus Airline Ancillary Services solution, which is integrated and supporting airlines to deploy ancillary services in over 100 markets worldwide.
Strong growth for Amadeus in 2014. (Image credit: Violka08/iStock)
On the travel agency front, new multi-year agreements were reached with the leading global online travel company Orbitz Worldwide – to support its brands in North America from January 2015 – and with TUI Travel, one of the world’s leading leisure travel groups, operating in over 180 countries with more than 30 million customers.
As part of its commitment to merchandising, Amadeus has announced a partnership with leading US online travel agency Expedia, to start offering branded fares to its customers through the Amadeus Fare Family solution by mid-2015.
A multi-year agreement was reached with Ctrip, China’s leading travel company in terms of market capitalisation, to include the provision of all air content for points of sale outside of mainland China.
In the autumn Amadeus unveiled its vision for a traveller-centric global travel ecosystem, where airlines will be able to unlock the opportunity for more than $130bn in additional revenue annually by 2020 through adopting an omni-channel strategy for ancillary sales. This vision will be underpinned by Amadeus with the development of a new traveller-centric Global Merchandising System with full integration across the Amadeus Altéa Suite.
Corporate travel IT remained a priority as Amadeus made great strides in its growth strategy for the segment. During the year Amadeus completed, through a tender offer process, the acquisition of i:FAO, Europe’s most widely used cloud service for planning, booking, managing, and reporting expenses for business travel.
IT Solutions
Revenue grew 22.5% to €962.6 million (including M&A activity). Excluding acquisitions, revenue increased 12.9% to €887.3 million.
Passengers Boarded progressed by 12.9% to total 695.4 million.
Growth was driven by the implementation of airlines during the year, in addition to the full-year impact of those implemented during 2013 (such as Asiana, Thai Airways, and Garuda Indonesia), on top of 3.5% organic growth.
Airline IT
In July the first ever-scheduled international flights flown by Southwest Airlines took off, marking the successful full implementation of Amadeus’ Altéa Suite for international operations. This followed an announcement in May that Southwest signed a contract for Amadeus’ Altéa Suite to support the carrier’s U.S. domestic operations.
Southwest and Amadeus will work together to fully move the carrier to the Amadeus Altéa platform for both international and domestic flights in the coming years. Its market share in IT Solutions was further supported in the third quarter by the migration of Korean Air.
Further Altéa contracts were also signed with many other leading airlines throughout the year, amongst others including Japan Airlines and Swiss International Air Lines. At the close of the year 133 airlines around the world were contracted for both Altéa Reservation and Altéa Inventory, 117 of which were contracted to use the full Altéa Suite. At the same date, 124 airlines were implemented for both Altéa Reservation and Altéa Inventory, 91 of which to the full Altéa Suite. Based upon contracts signed,
Amadeus estimates that by 2017 the number of annual contracted Passengers Boarded will be close to one billion, which would represent an increase of 44% vs. the 695 million passengers processed on the Altéa platform during 2014 – or a compound annual growth rate (CAGR) of circa 13%.
Airport IT
Amadeus continued its expansion into the airport IT space with the acquisition of UFIS, a leading information technology player that brings a complementary suite of airport technology solutions as well as a set of important customer relationships worldwide.
Reinforcing its commitment to developing the airport of the future, Amadeus launched Amadeus Airport Common Use Service (ACUS), a next-generation airport platform capable of carrying out all passenger processing functions while allowing airlines and ground handlers to share the physical space and IT resources of the airport.
Innsbruck became the first airport to contract the Amadeus Airport Passenger Verification solution, which facilitates smoother security control processes, as well as the first airport to deploy Amadeus Airport Common Use Service (ACUS). In addition the airport is also implementing Baggage Reconciliation Solution (BRS).
The Altéa Ground Handler Departure Control was contracted by 19 new ground handlers during the year, bringing the total figure to 84.
Meanwhile, London Gatwick Airport (LGW) became the first airport to implement the Amadeus cloud-based Airport-Collaborative Decision Making Portal (A-CDM). Assisted by Amadeus, London Gatwick Airport will handle 55 flights per hour from the world’s busiest runway and estimates up to 2 million additional passengers.
Hotel IT
Following the announcement in late 2013, Amadeus completed the acquisition of US-based Newmarket International in the first quarter of 2014 for US$500 million. Newmarket International operates in the group and event management segment, serving around 22,000 unique properties in 154 countries. The newly acquired company will operate as a stand-alone business within Amadeus’ Global Hotel Group, integrating several Amadeus products and services.
A strategic technology relationship was signed with InterContinental Hotels Group to support Amadeus’ mission of building a community model for the hotel industry. The combination of IHG’s industry insight and expertise with Amadeus’ technological capabilities and broad travel experience will ensure that IHG continues to offer the most innovative and efficient technology solutions at all stages of the guest journey.
Rail IT
BeNe Rail International (BeNe RI), an international distribution technology joint venture set up by NS and SNCB/NMBS2, agreed to enter into a long-term strategic IT partnership with Amadeus to create a new rail community IT platform as part of Amadeus’ Total Rail solution.
This unique platform is based on the concept of a community model whereby a third party IT expert, Amadeus, develops and hosts applications for several rail companies to share and benefit from synergies. The platform proposes a solution to cover all end-to-end processes for rail travel in Europe, hosted and run from Amadeus’ Data Centre in Erding (Germany).
Payments
Debit and credit cards from UnionPay, the largest card scheme worldwide with over 4.3 billion cards in circulation, were integrated into the Amadeus Payment Platform (APP) following an agreement reached with UnionPay International, a subsidiary of China UnionPay.
Further expanding the capacity of Amadeus travel customers to accept more payment types from travellers in more countries and in more currencies, a global agreement was reached to integrate into the Amadeus Payment Platform (APP) the extensive payment services of Worldpay, the global leader in payment processing, risk management and alternative payments.
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