For all the talk of
their ultimate demise, global distribution systems process growing volumes of
travel transactions. They slowly are starting to accommodate sales of airline ancillary
items and have been securing more content from low-cost carriers. Each of the
three primary players continues to provide an array of services to travel
management companies, corporate buyers and travelers, and their parent
companies are pushing IT services to airlines, hotel companies and others.
Amadeus is the most
profitable of the three and has been posting the highest revenue growth rates.
By its measure of booking volume, it's setting the pace, and by its measure of
travel agency air booking market share, it's the largest and growing (up to
39.9 percent in the first quarter). On the IT side, it recently secured a huge
contract to supply Southwest Airlines with a domestic reservations system. More
than 100 airlines already use the Amadeus Altea platform and, once implemented,
Southwest will be the largest.
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Sabre in April conducted
an initial public offering after seven years of fully private ownership. Aside
from Travelocity—for which a new business model is being implemented—revenue is
increasing in the two core business lines.
Within Sabre Travel
Network, first-quarter direct billable bookings increased 4.4 percent year over
year, and Sabre claimed its "booking share" improved marginally to
35.4 percent. CFO Rick Simonson said the company expects Travel Network booking
growth between 2.5 percent and 3 percent for full-year 2014.
Like Amadeus, Sabre is
optimistic about its IT services. CEO Tom Klein said Airline and Hospitality
Solutions is "on its way to over $1 billion in annual revenue in the next
few years." Though Sabre lost the Southwest business to Amadeus, it
secured a reservations system contract with the newly combined American
Airlines.
Though it continues to
work closely with Delta, Travelport's IT activity is much more modest. CEO
Gordon Wilson during a May conference call said that "we're not trying to
compete with where Amadeus and Sabre are in providing full passenger services
systems to airlines on a multi-host basis," but added that Travelport
still is investing in such "add-on" software as departure control,
shopping and faring systems. Meanwhile, Travelport now calls its distribution
business line Travel Commerce Platform, within which the number of segments
processed during the first quarter increased 2 percent year over year after a 1
percent increase during 2013. Its market share, though, appears to lag Amadeus
and Sabre. Travelport has been growing "beyond air" activities,
including those related to hospitality and payment.
This report originally appeared in the May 26,
2014, edition of Business Travel News.