Margrethe Vestager EU Competition Commissioner turns her attention to Amadeus and Sabre
The EU Competition Commissioner Margrethe Vestager has announced an investigation into whether the practices at Amadeus and Sabre have resulted in harm to consumers through increased fares. This investigation was not unexpected. The investigation will focus on the GDS agreements with airlines and agents. It appears to specifically target any restrictions the contracts have with respect to new technologies and new methods of distribution and that this in turn drives up the price of the tickets. T2RL believes this will be a very challenging investigation for the EU. Sabre's timing for the purchase of Farelogix seems to be timed almost perfectly as no doubt Farelogix had been one of the specialist firms offering new technology for airline distribution. Ultimately airline distribution is complex and much more about absolute values of revenue less distribution cost than averages. T2RL will follow this case closely in our research and analysis. Stay tuned to www.t2rl.net.
23 November 2018
Sabre to buy Farelogix for $360M
Sabre have agreed to purchase Farelogix for $360M. The rumours have been swirling in the market on the future of Farelogix for some time and now we know the outcome. T2RL believe there would have been a very competitive bidding process managed expertly by Evercore and the Farelogix board. T2RL see the timing of this purchase as good for Sabre. Whilst there is no doubt the valuation will be the subject of scrutiny, Sabre get some excellent client contracts and services to compete aggressively in the airline retail merchandising space. Whilst the Farelogix solution is PSS-agnostic the purchase, if approved will help Sabre build a compelling stack of services focussed on revenue generation “offer management”. Sabre will be able to inject their revenue management expertise for optimising the offers and be able to provide an industry compliant order management infrastructure. It is also T2RL's view that Jim Davidson and his team were ‘just a DCS away’ from building the core capabilities necessary for a competitive PSS offer so T2RL consider this as both an offensive move into NDC and merchandising and a defensive move in terms of revenue retention from existing customers. The bottom line is that there will be no reason or far fewer reasons for airlines to move away from Sabre’s PSS given the stack of capabilities on offer. This may just be the reason the Sabre management and board agreed to pay such a multiple of earnings for the asset.
14 November 2018
SAS selects Datalex for NDC powered shopping
SAS have selected Datalex after a detailed evaluation of the alternatives for the provision of their multi-channel shopping engine. The Datalex agreement will also deliver NDC for those agents willing and able to connect directly to SAS. This is a big win for Datalex against a competitive market for digital transformation.
25 October 2018
Sky Angkor Airlines migrates to Travelsky’s QUICK Passenger Retailing System
Sky Angkor Airlines from Cambodia has migrated from AeroCRS to TravelSky's new QUICK (PRS) Passenger Retailing System. Sky Angkor Airlines is the first airline to migrate onto TravelSky's new QUICK platform which was launched at the end of 2017. QUICK PRS was developed over a period of 2 years, and supports the initiative of increasing TravelSky's global presence.
06 September 2018
Radixx launches new departure control system suite 'Radixx Go'
Radixx has announced the launch of their new departure control system in partnership with Ink Aviation. Radixx & Ink Aviation have combined their skills to develop a cloud based DCS product suite 'Radixx Go' that provides airlines with new mobile and self-service technology. 'Radixx Go' enables passenger touch points on multiple devices thus moving DCS closer to the passenger.
05 September 2018
Sunwing Airlines chooses Radixx for PSS
Radixx has annouced their newest airline customer, Sunwing Airlines. The airline will migrate to Radixx PSS & EZY IBE.
09 August 2018
Cambodia Airways chooses Radixx for PSS
Start-up carrier Cambodia Airways commenced operations on 10th July 2018 and is the first airline to go live on the Radixx NextGen retailing platform.
18 July 2018
T2RL's research highlights 4.18 billion passengers in 2017
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 1100+ carriers. T2RL's growth for passenger volumes from 2016 is 7.7%.
30 May 2018
PROS and SAP Hybris team up for the next generation PSS and airline commerce
PROS and SAP Hybris have announced a partnership that will deliver a valid alternative for airlines seeking a solution for e-commerce and NDC compatible connections. All that's missing now is the DCS for a complete solution set and participation in the PSS market place. Most important was the demonstration at the PROS Outperform customer event of the rearward compatibility with edifact messages. This provides airlines with the ability to manage the transition to a modern digital platform and maintain part of the industry network. PROS investment in Vayant delivers priced availability, SAP's Hybris delivers the merchandising and context for attracting customers. This is an exciting development for the airline industry and will provide some impetus towards a new offer and order based architecture.
17 May 2018
Pakistan International Airlines chooses Hitit for PSS
Pakistans national carrier Pakistan International Airlines (PIA) has signed a contract with Hitit for its passenger service system on 18th April 2018. PIA will migrate to Hitits Crane platform from its current Sabre reservation system that the airline has used for the past two decades. PIA flew over 4 million passengers in 2017, and will serve as Hitits second largest PSS customer after Pegasus Airlines. No date for migration was provided in the press release.
20 April 2018
Delta Airlines cuts over to Farelogix for GDS and Partner Airline Availability Processing
Delta Airlines have cutover the Farelogix solution for the calculation of availability for all requests coming from the global distribution systems and airline partners. This is a huge step for Farelogix given the size and scale of Delta Airlines and a massive commercial win. Whilst availability processing is short logical step from the merchandising solution, availability processing is one of the "crown jewels" of airline commercial systems. New technology offers the ability to compute offers in real time on hardware of a modest cost. Amazon, Google and Microsoft have made pay as you go computing a reality offering further cost reductions in the medium to longer-term. Most airlines and their suppliers have had to work very hard and have invested tens of millions of dollars to move shopping away from the more expensive computing environments given the massive increases in volumes of transactions and availability requests from exposure of systems to users, robots and system to system interfaces. Farelogix are clearly looking to disrupt the status quo of the industry. T2RL believe that Amadeus, Sabre, Travelport and Travelsky will be paying very close attention to this news. They will be able to observe system performance first hand given their travel agencies and hosted carriers will be generating billions of requests and consuming the Farelogix responses in real-time. By successfully inserting themselves in the path between the airline inventory and consumers in the indirect channels as a 'single source of truth', Farelogix have made themselves a real target for acquisition.
11 April 2018
Jin Air migrates to IBS
Jin Air has completed their migration to IBS PSS (iFly Res) on Sunday 25th March 2018. IBS migrated Jin Air off two systems; Amadeus which was used for International and Korean Airlines TOPAS system which was used for Domestic. This contract with IBS was signed in June 2017 and the migration took just under 9 months. Jin Air is IBS's second Korean airline customer and having carried close to 8.6 million passengers in the year 2017, Jin Air now serves as IBS's second largest iFly customer after SunExpress. Jin Air will also be migrating to their loyalty platform (iFly Loyalty) later in the year.
28 March 2018
Philippine Airlines chooses Amadeus as its PSS
Philippine Airlines have chosen to migrate to Amadeus from Sabre. No date for migration was provided in the press release. Philippine Airlines flew over 14 million passengers in 2017 according to statistics published by the Philippine Civil Aviation Board in February 2018. T2RL are unable to comment on any detail about the strategy, decision and project as Philippine Airlines used T2RL's "Procure IT" solutions to issue the RFP and manage the negotiation and contracting process.
19 March 2018
Aeromexico extends Sabre PSS contract
Aeromexico have announced an extension of their contract with Sabre. According to the press release Aeromexico carried some 21 million passengers in 2017. Aeromexico have been growing at an compound annual growth rate of about 6%. No details were included in the press release on the term of the extension to the agreement.
06 March 2018
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
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