Amadeus is to acquire Navitaire, a wholly owned subsidiary of Accenture and a provider of technology and business solutions to the airline industry, for USD830 million.
Navitaire, which focuses on the low-cost and hybrid-carrier segments of the airline industry and has a global customer base of more than 50 operators, provides revenue-generation and cost-streamlining solutions in the areas of reservations, ancillary sales, loyalty, revenue management, revenue accounting and business intelligence.
The addition of Navitaire’s portfolio of products and solutions for the low-cost segment will complement Amadeus’ Altéa suite of offerings for its largely full-service carrier customer base, giving the company the ability to serve a wider group of airlines. Amadeus 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. Amadeus believes that the acquisition will enable it to improve the connectivity between different carriers in the same airline groups or alliances and that the functionality from each platform will enhance the other.
“Bringing Navitaire’s experience, industry know-how, client base and strong product portfolio is a significant step for Amadeus in the low-cost and hybrid-carrier segments,” says Luis Maroto, President and CEO of Amadeus. “Airlines of all shapes and sizes face an increasingly competitive market for an increasingly demanding traveler, and this transaction will give us the ability to serve all airlines with technology that can enable them to drive new revenues and contain their costs.”
Navitaire has a strong track record of revenue growth, profitability and cash generation.
As part of the acquisition, approximately 550 Navitaire employees, including the company’s senior management team, are expected to transfer to Amadeus.
Amadeus and Accenture expect to close the Navitaire acquisition in the fourth quarter of calendar 2015, following regulatory approvals. Amadeus expects the acquisition to have minimal impact on its financial performance in 2015.
In a separate agreement, Accenture and Amadeus have agreed to form an alliance to help lead airlines through the digital transformation taking place in the industry and drive efficiency in the global operations of airlines’ businesses. The alliance combines Amadeus’ and Navitaire’s industry solutions and experience with Accenture’s aviation expertise and global capabilities in technology, analytics, cloud, mobility and operations. Accenture and Amadeus will jointly focus on digital travel services, with an emphasis on commercial passenger operations in order to provide a more seamless traveler experience from “door to door.”
Under the alliance agreement, 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.
“The travel industry is a strategic market for Accenture, and we continue to grow our practice in this area to help our clients better serve their digital customers,” says Eric Schaeffer, senior managing director, Accenture. “The combination of products and solutions from Accenture, Amadeus and Navitaire in this alliance will create a unique offering in the market that no single provider currently offers. We’re also excited to be leveraging our experience in the airline industry and our technology expertise to provide Amadeus with a range of outsourcing and R&D services.”
David P Evans, Navitaire CEO, says: “Today’s announcement marks a new chapter for Navitaire that will enable us to accelerate and deepen our industry offerings. Our customers will benefit from greater access to Amadeus’ industry solutions to help support their growth and link with traditional industry partners. At the same time, they will continue to benefit from Accenture’s expertise and capabilities as a result of the Accenture-Amadeus alliance.”