Amadeus Feels No Pain from Lufthansa Surcharge

As the largest GDS company in Germany, Amadeus was the most exposed to any attempt by Lufthansa to disrupt the distribution system.

But the Lufthansa Group’s €16 surcharge on GDS bookings, which went into effect on Sept. 1, ironically had a positive effect on the company’s earnings. By allowing its full-content agreements with GDS companies to expire, the group’s airlines no longer receive the substantial discounts on segment fees that the agreements provide.

Amadeus reported a profit of €174 million ($185.9 million), a 7% increase from third-quarter 2014, on revenues of €988 million ($1.05 billion), up 15.7%.

Distribution revenue increased 14%, to €672.5 million ($718.6 million), while airline and hotel IT solutions revenue increased 19.5%, to €315.6 million ($337.3 million).

In an example of Amadeus’ “commitment to supporting its airline partners in realizing their full revenue potential,” Luis Maroto, Amadeus’ president and chief executive officer, noted that 25 airlines have contracted for its Fare Families merchandising solution, and 18 have been implemented.

Among them are Lufthansa and Austrian Airlines; Swiss International and Brussels Airlines, also members of the Lufthansa Group, had already implemented the solution.

Etihad will become the first Middle Eastern carrier to implement the Fare Families solution in the indirect channel.

North America continues to be the fastest growing region for the company, with a 35.1% increase in bookings for the first nine months of the year.

Much of the growth this year has come from Orbitz Worldwide, which until this year was Travelport’s largest customer for GDS services.

Amadeus got the lion’s share of the business when Orbitz opted for a multi-GDS strategy when its previous contract with Travelport expired.

Amadeus’ bookings in South Korea got a big boost from the conversion of users of the old Topas reservations system to Amadeus.

Amadeus’ worldwide year-to-date bookings were up 9.4%, to 389.7 million.

In September, the U.K.’s Competition and Markets Authority asked the European Commission to take a closer look at Amadeus’ acquisition of Navitaire, the most popular passenger services system among low-cost carriers.

It did not publicly disclose its reason for the request.

Nevertheless, Maroto said he was “confident” that the deal could close in the first quarter of 2016.

The U.S. has already approved the deal.