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Japan Airlines Migrates to Amadeus
Last night Japan Airlines completed their migration to the Amadeus Altea PSS. The program of work was one of the longest for Amadeus with significant development required to complete the necessary gaps for operation of the Altea platform in the Japanese market. The Amadeus cutover is a significant step forward in the retirement of the JALCOM system. Japan Airlines will roll out the Amadeus departure control system (DCS) over a period of time which limits the potential for disruption and provides for a smoothing of migration resources.
16 November 2017

Flybe chooses Amadeus for PSS from 2019 onwards
Flybe and Amadeus have announced a partnership to deliver the core digital infrastructure to support the airline's transformation under the leadership of CIO, Peter Hauptvogel and CEO, Christine Ourmières-Widener. Hauptvogel is one of the most experienced airline CIOs in implementation and migration. Flybe will be moving from DXC's Shares platform towards the end of the year of 2018. The loss of another Shares customer will leave DXC with two major customers United and Copa at the end of 2018.
06 November 2017

Sabre renews PSS contract with Ethiopian Airlines
Sabre have renewed their contract for supply of PSS with Ethiopian Airlines. T2RL believe that the extension takes Ethiopian out of the addressable market until at least 2024 and secures an important revenue stream for Sabre going forward with this ambitious and fast growing airline.
31 August 2017

PROS acquires Vayant
PROS have made the step from revenue management and dynamic pricing to a full offer management solution set by acquiring Vayant. PROS are by far the market leader in the provision of revenue management technology to airlines as measured by total passengers boarded. The acquisition of Vayant creates significant new opportunities for PROS to expand their footprint in their customers and challenge the PSS providers for priced availability as a cloud based service. This offering is particularly relevant today as airlines look to new ways of doing business including IATA's NDC and One Order.
03 August 2017

American Airlines to pay agents an NDC Incentive of $2.00 per segment for AA marketed flights
American Airlines (AA) has led the charge to direct connections and always been willing to take on the challenges associated with GDS distribution. This step is a move to incentivise those agents and drive adoption of the NDC standard. By paying $2 per segment for all AA marketed flights they are now competing with the GDS in some segments of the agency market that currently receive little or nothing in terms of incentives. T2RL's research suggests that GDS incentive money is not evenly spread. The OTAs and larger TMCs receive far more than their fair share of the booking fee incentives. This allows smaller agents to compete with their larger rivals with AA content.
23 June 2017

Malaysia Airlines and MasWings migrate to Amadeus
Malaysia Airlines completed their migration from the SITA PSS to Amadeus on June 11th. The airline, which reported over 15 million pbs in 2016 (Source: T2RL) migrated their Reservations, Inventory and IBE over to Amadeus along with their subsidiary MasWings.
12 June 2017

T2RL's research highlights nearly 3.9Bn passengers in 2016 vs. IATA's 3.7Bn.
T2RL have now completed their annual research exercise into global passenger volumes. The findings are based on a bottom up approach (airline by airline) and take into account some 1000+ carriers. The addressable market for solutions based on passengers boarded is therefore around 5% larger than that provided by IATA which was reported at 3.7Bn. T2RL's growth for passenger volumes from 2015 is 8.6%.
27 May 2017

British Airways and Iberia will follow Lufthansa's policy on surcharging GDS bookings
Finally after considerable speculation, British Airways and Iberia have written to the travel agents to indicate they will levy a surcharge on bookings made via the GDS. The surcharge will incentivise travellers to book with those travel agents that use direct connection technology over a GDS or to move to the airlines own websites. British Airways will also provide an agent portal for bookings for those that do not have direct connect technology. This move has been anticipated for some time and is not a surprise.
26 May 2017

Air Berlin will not migrate to Sabre
Sabre have filed a document to indicate they will be recording a charge of between USD 80 million and 100 million less sums due from Air Berlin in their accounts. Generally PSS providers capitalise the costs associated with implementation and set up of new customers and then amortise this amount over the term of the agreement according to their accepted accounting principles. The amount Sabre have quoted seems very high for a carrier the size of Air Berlin. T2RL conclude that there must have been considerable customisation of the solution combined with implementation services delivered over an unusually long period of time for the amount to be so high. It is also clear from the filing that there is a termination fee in the PSS contract and that Sabre expect to get this fee. Given Air Berlin are not moving to Sabre it is very likely that they remain on Amadeus and other custom developed solutions for the forseeable future.
25 May 2017

New leader for Sabre Airline Solutions is Dave Shirk
Sabre have appointed Dave Shirk to lead the airline IT unit to replace Hugh Jones. Sabre have selected an executive with technology product management expertise rather than an airline industry executive. Dave arrives at a time when Sean Menke's team have some significant challenges ahead. They have to deliver a competitive product portfolio in the commercial systems segment against a competitor that has significant advantages in technology, economies of scale and service presence. T2RL's research suggests that price competition will intensify in the coming years as the PSS/GDS system providers seek to win the inventory system that prevents longer term disintermediation in the GDS business and locks in the industry marketing architecture of class, fares via ATPCO or other standards and schedules.
27 April 2017

Farelogix enters the pricing solution market with Canada's Westjet.
Farelogix announced their intention to provide pricing and shopping functionality in November 2016. Westjet is their pricing and shopping launch customer. Farelogix have been successful in expanding their footprint inside WestJet. The announcement suggests that Farelogix's value proposition is tied to a reduction in costs associated with support for significant look to book ratios driven by system to system connectivity and robotics.
06 April 2017

Accelya and Mercator To Merge
As we predicted in our report on the Market for Airline Passenger Services Systems 2016, Warburg Pincus and Mercator have continued to invest in companies within the travel sector. Last year saw the successful purchase of revenue management provider, RMS Inc. and now with revenue accounting specialist, Accelya. The combined share for Mercator and Accelya in revenue accounting will be close to 20% as measured by airline passengers boarded.
07 February 2017

Amadeus' Navitaire renews Ryanair's PSS contract to 2025.
Navitaire to complement Ryanair's labs and not be replaced by in-house developments until at least 2025. Navitaire's largest customer by passengers boarded at 117 million for the 12 months to 2016 have extended their existing agreement to 2025 with Amadeus' Navitaire. T2RL believe that Dave Evans, Navitaire's CEO and Amadeus' John Dabkowski would have been very keen to ensure this business renews given the rumours that Ryanair had ambitions to go it alone, much like Emirates. T2RL believe that Ryanair would account for no more than 15M USD in annual revenues however for the 12 months to 2016. In a March 2016 interview, Ryanair's CTO John Hurley claimed there were some 250 people working on technology projects, mobile and web with staff spread across locations in Dublin, Poland and Spain. T2RL believe this would give Ryanair a total spend on IT services well below 1% of annual revenues maintaining their efficiency and competitive cost base.
04 January 2017

Radixx Announces Acquisition of EZY
Radixx and EZY have already been partners for several years, offering a joint solution for PSS and ecommerce. Yesterday's announcement of their merger will secure Radixx's IBE and ecommerce offering to many of their customers. It will also strengthen and secure Radixx's further expansion into the airline retailing space through offering new capabilities in the area of loyalty and mobile.
10 November 2016

New network scheduling solutions from Amadeus and Optym.
Amadeus enters the schedule planning market place in conjunction with specialist Optym to deliver a new generation of solutions optimising multiple attributes for improved profitability. As commercial and operations airline systems converge, Amadeus has made the decision to partner on the delivery of the primary airline customer proposition - the schedule. T2RL are certain Amadeus will partner, acquire and develop solutions for the operations market as they seek growth and opportunities over and above their leading PSS and distribution solutions for airlines.
03 November 2016

Sabre migrates Alitalia, displaces both in-house mainframe and Google's shopping solution.
Sabre migrated Alitalia allaying some fears about challenges associated with execution on Sabre's aggressive sales pipeline. Sabre's implementation teams replaced Alitalia's in-house mainframe solution with Sabre's PSS solution. Sabre have also succeeded is displacing Google's shopping solution based on the ITA QPX platform.
19 October 2016

Christophe Mueller, Ex-Airline CEO to lead Innovation and Digital, including PSS at Emirates
Christophe Mueller's appointment at Emirates is significant for a number of reasons. Many would consider this a step down from his previous roles. T2RL do not see this as such. Mueller has always demonstrated ambition with respect to technology transformation. He has been open to innovation especially with respect to new solutions for PSS. At Aer Lingus in particular he was willing to think outside the box and consider alternatives, including partnerships, asset purchases and external funding sources. He was also at Malaysia Airlines when they made the decision to move to Amadeus and remain mainstream. T2RL see Emirates as the perfect place for him to transform the systems and processes of one of the most significant and important airlines in the World. Emirates will have have a recognised business leader to help them execute on, or possibly less likely revise and revisit the strategy if they can not achieve their goals.
08 September 2016

Sabre to replace CEO, Tom Klein by the end of 2016.
Sabre have announced that Tom Klein will resign on 31 December 2016 giving the organisation time to find a replacement CEO. Klein has been the CEO since 2013.
20 June 2016

Asia Pacific LCCs launch the Value Alliance
A group of low cost carriers in Asia Pacific have built an alliance to strengthen their direct sales opportunity and allow them to compete directly with online agents. By making the inventory sellable on each of the partners website they have improved the consumer offer and opportunity by effectively offering an interline sales model. Jetstar and Air Asia are not participating in the new alliance. The airlines are not all hosted on a single platform either and are using some new technology from ABB to power the sales integration.
19 May 2016

Malaysia Airlines Selects Amadeus' PSS Solution to replace SITA
Malaysia Airlines have selected Amadeus' PSS. Amadeus' growth in Asia outside China remains unchallenged. No migration dates from SITA have been announced but T2RL expect the timeframe to be 2017 or mid-2018, beyond the term of the current agreement with SITA. T2RL see this is a real blow to the long-term prospects for SITA in the passenger services business. SITA have worked very hard to develop their new solution, but they have been unable to retain one of their key customers and one that gave considerable hope to their revival on signature with Malaysia Airlines. SITA will have to make some hard decisions including, T2RL believe considering the sale of the existing business. The loss of Malaysia Airlines will make any future sales much more challenging and existing customers coming to term of their agreements will be likely to lose confidence in the longer-term. The airline community and shareholders will undoubtedly be concerned about competition in the longer term. Perhaps a new buyer could inject the necessary funding or skills to be able to complete the project. T2RL estimate that SITA will have spent between $200 million and $250 million to date from the original estimate provided to the board of some $100-120 million.
05 May 2016

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