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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

Hitit signs and implements another new customer with Precision Air in Tanzania
Hitit have announced the implementation of a new airline Precision Air on 6 April 2016. Hitit's modern technology coupled with a sound understanding of the capabilities required from an airline savvy crew makes them one of the vendors to watch. They are competing effectively in a market segment with more than 300 million passengers boarded. T2RL expect them to grow significantly in the coming 12-18 months.
12 April 2016

IBS Wins SunExpress
See T2RL's First View for more details of this strategically significant PSS deal.
22 January 2016

Amadeus' acquisition of Navitaire is approved by EU. Amadeus' market share becomes unassailable for all segments in PSS.
The European Commission has reviewed Amadeus' proposed acquisition of Navitaire and approved the deal. The merger may now take place. The merger was referred to the European Commission by the UK's Competition and Markets Authority, the national competition authorities of Austria, Germany and Spain following submissions by airlines and stakeholders in those markets.
19 January 2016

Virgin Australia Extends Sabre PSS Contract Term and Solution Scope
Sabre have extended their PSS contract and technology footprint at Virgin Australia. Sabre's footprint is extended by providing customer insight through the customer datahub and retail offer management through their dynamic retailer and customer experience manager. These products are designed to improve conversion and increase sales in the direct channel.
17 July 2015

GDSs sued in US District Court in a filing on 14 July 2015
The GDSs are being sued by a group of individuals in the Southern District Court of New York. The complaint suggests the GDSs conspired and collaborated to fix and increase GDS pricing. The higher fees were in turn was passed on in higher air fares to consumers. The claims appear to be based on the documents that were unsealed as part of the ongoing US Airways and Sabre litigation.
15 July 2015

Amadeus to buy Accenture's Navitaire
Amadeus announced its intention to acquire Navitaire and enter into a strategic alliance with Accenture. Amadeus will continue to offer and support the Navitaire solution to low-cost carriers. This transaction is expected to close in the fourth quarter of 2015 subject to related approvals.
01 July 2015

Amadeus' Response on the effect of Lufthansa's Distribution Strategy
Amadeus responded to Lufthansa's announcement to introduce a surcharge of 16 Euros per ticket for tickets booked using a global distribution system. The response suggests there would be no financial impact. This suggests any decreases in volume will be compensated by an increase in the charges. It also implies that the ratio of Amadeus' bookings per ticket is high at about 2.7. T2RL believe this indicates that on average Lufthansa is selling complex connecting itineraries through the GDS rather than simple point to point itineraries. It also suggests that the average booking fees have risen by about 2.5-3.0% since 2008 as the surcharge rate at that time was published at 4.90 Euros.
11 June 2015

Lufthansa Group Carriers to pass GDS fees on to Buyers in the GDS Channel
From 1 September, 2015 the Lufthansa Group, specifically Lufthansa, Austrian Airlines, Brussels Airlines and Swiss will surcharge 16 Euros for each ticket issued through any GDS. Direct channels will not carry the surcharge. Lufthansa are making all fares available without surcharge on a number of websites and direct channels. This is clearly a push to make GDS charging transparent. This follows some of the low-cost carriers. Clearly both PSS and GDS agreements must have been in place for this to happen. Lufthansa's actions will definitely encourage other airlines to seek the right to surcharge and make the GDS booking costs transparent to buyers. Whilst T2RL believe Lufthansa Group carriers will not suffer share loss in their domestic markets, sales in regional or distant markets may require fare adjustments to remain competitive and compelling. Lufthansa will seek to educate the travellers that the lowest price for tickets will be their own websites.
02 June 2015

Sabre to buy Abacus
Sabre plan to acquire the remaining shares in Abacus International. Assuming regulatory approval is granted, Sabre's management will control the setting of booking fees and pricing as soon as the transaction is concluded. The sale also appears to secure the Abacus shareholders participation with the mention of new long-term distribution agreements for the 11 owners of Abacus.
14 May 2015


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