Within what could easily be defined as a complex travel industry environment, IT specialist Amadeus has maintained good momentum into 2019, with healthy growth levels in both of its core segments. Its Distribution and IT Solutions businesses and the consolidation of TravelClick contributed to double-digit growth both in revenue and EBITDA in the quarter, as well as to an adjusted profit of EUR334.7 million, up +9.5% compared to the same period in 2018.
The performance was largely driven by its IT Solutions side of the business with a +31.2% growth in revenue during the first quarter, to EUR570.0 million. All Nippon Airways or Qatar Airways were among existing customers contracting further solutions, while new business helped grow its customer base to 214 airlines.
Passengers boarded via Amadeus grew +4.6% during the quarter, to 436.1 million, supported by 2018 implementations (including S7 Airlines, Maldivian Airlines, Cyprus Airways and Aeromar to Altéa and Volaris Costar Rica to New Skies) and the ones so far in 2019 (including Philippine Airlines).
Organic growth of +6.0% also contributed to this passenger boarded increase. But this figure is 1.6 percentage points less than Amadeus recorded in the same period of 2018, mainly due to a softening in global air traffic growth.
In the distribution space, and where market conditions were much less favourable during the period, Amadeus says it was still able to increase its competitive positioning with an expanded content offer for subscribers. Revenue in this segment grew +5.6% to EUR839.9 million even though a global slowdown in growth in travel agency industry air bookings continued (+0.0% growth compared to +1.1% in the fourth quarter of 2018).
Amadeus says that apart from North America and Latin America, all other regions reported an industry decline mainly driven by geopolitical and macroeconomic factors. Asia Pacific registered the strongest deceleration, largely driven by a poor performance of India (due to several factors, including the financial difficulties of Jet Airways and the upcoming elections in the country).
Despite this environment, Amadeus’ travel agency air bookings increased +1.6% between January and March, supported by market share growth in all regions except Asia Pacific, mainly due to India (excluding India, its bookings grew +3.4% globally). North America was its fastest growing region with a bookings increase of +14.6%, while Amadeus also returned to growth in Western Europe, on the back of market share gains.
CHART – Amadeus’ booking growth in 1Q2019 was supported by market share expansion in all regions expect for Asia PacificSource: Amadeus
Already since the close of the first quarter, Amadeus has boosted its customer base. In April, it announced that FCM Travel Solutions, the flagship global business travel division of Flight Centre Travel Group, will start using its new NDC-enabled selling platform connect interface, and making NDC bookings through it in the coming months. That was followed this month by the renewal of a distribution agreement with Finnair, which now includes the Finnair NDC Partner Program.