Amadeus said today it is acquiring Navitaire, a low-cost hosting platform for airlines that is especially popular with low-cost carriers, from its owner, Accenture, for $830 million.
Navitaire helps a few dozen airlines worldwide pursue various e-commerce and merchandizing options using cloud-based technologies, particularly its New Skies reservation and passenger service system (PSS).
Amadeus' own main offering to airlines, Altéa suite, has generally only been favored by larger network airlines to date. Navitaire's services are generally cheaper and offer more direct, faster merchandising control by the airline, the company claims.
The purchase gives Amadeus, one of the few major global distribution systems and travel technology companies, perhaps half of the market share of PSS passenger emplanements worldwide -- depending on how you measure it.
Amadeus also gains a special advantage in Asia Pacific, where Navitaire has significant market share.
In contrast, rival China-based global distribution system TravelSky is in the early stages of attempts to advance its NextGen project, a system that relies on older Unisys mainframe technology.
In a statement, Amadeus said that it intends to:
"market and sell the two product portfolios separately and will continue to invest in both platforms, enhancing the services and functionality availability to all types of carriers."
The move follows rival GDS Sabre'sacquisition of Abacus, an Asian Pacific GDS.
Amadeus now dominates Asia Pacific for airline hosting. It has used its airline hosting deals to generate business for its air GDS system in the past five years, stealing overall share from Sabre.
But Sabre has been putting up a strong fight for airline customers that are going hybrid -- mixing between low-cost, a la carte models and more full-service network models.
Accenture has been rumored to be shopping Navitaire for months. An interesting aspect of the deal is this part of the official statement:
"Amadeus and Accenture have formed an alliance... Accenture will be designated as an Amadeus "Strategic Partner" for its Airline IT business for management consulting, technology consulting, systems integration, business process outsourcing and digital services, complementing Amadeus' existing in-house consulting and digital services. ...
Accenture and Amadeus have also agreed to enter into a third agreement under which Accenture will provide Amadeus with infrastructure outsourcing, application and research and development services. Accenture will continue to provide hosting services for current Navitaire clients as well as Amadeus's future clients that purchase the Navitaire solution."