Amadeus Chief Unshaken by Lufthansa Plan

As the dominant GDS in Germany, Amadeus has the greatest exposure to Lufthansa’s efforts to shift share to its direct channels. But CEO Luis Maroto isn’t losing any sleep over the €16 ($17.58) surcharge the carrier plans to impose on GDS bookings beginning Sept. 1.

Whatever volume is lost from the GDS will end up in Lufthansa’s e-commerce websites, managed by Amadeus, or will be transacted via Lufthansa’s direct connection, built by – you guessed it – Amadeus.

In addition, the carrier’s reservations, inventory and departure control systems reside on the Amadeus Altéa platform. No matter how a booking is generated, some revenue will end up in one of Amadeus’ pockets.

In a telephone discussion of Amadeus’ first-half earnings, Maroto said moving customers to direct channels is a “reasonable objective” for Lufthansa. Everybody in the industry is trying to do it, he added.

Maroto believes that most of the movement will take place within Germany and will probably be mostly domestic bookings, for which airlines pay lower segment fees.

Small impact
The overall impact on Amadeus will be small, he said, and “We are very happy to manage the e-commerce and technology of Lufthansa.”

That doesn’t mean that Maroto approves of Lufthansa’s plans. The carrier is ignoring the value of the indirect channel, he said.

Some travel management companies have indicated that they plan to shift bookings to other carriers, but “that’s not our decision,” Maroto said.

The distribution side of Amadeus is the larger, but the airline IT side also is thriving.

In the first half of 2015, 354.2 million passengers boarded flights operated by carriers that use Altéa, an increase of 7.8% over the first half of last year.

Revenue from IT solutions, which also includes Amadeus’ airport, hotel and payments solutions, grew by 22.3%, to €561.7 million ($616.87 million).

On the distribution side, Amadeus’ travel agency air bookings grew 10%, to 265.9 million, giving it a worldwide market share boost of 1.9 percentage points, to 42.2%.

North America continues to be its fastest growing region, with volume growth of 33.3%.

Distribution revenue grew 11.3%, to €1,415.1 billion ($1,554.2 billion).

Net income grew 10.3%, to €419.6 million ($460.76 million).