Air bookings in Amadeus dipped slightly year over year in the third quarter but at a much lower rate of decline compared with the previous quarter as the company reported a slowdown in cancellations.
Total air bookings declined 0.8 percent year over year in the third quarter to 121.2 million, markedly less than the 7.6 percent year-over-year drop that Amadeus reported in the second quarter.
In an earnings call on Friday, Amadeus CFO Carol Borg said the industry has seen a deceleration in new bookings, reduction in air traffic and an increase in cancellations globally since March due to the geopolitical situation in the Middle East, with bookings through the nine months of the year down 2.8 percent year over year.
"In the third quarter, as we predicted, we saw a notable improvement in our booking performance relative to the prior quarter, supported by a gradual normalization in the level of booking cancellations," Borg said. "Revenue returned to growth, driven by healthy revenue per booking growth."
Amadeus' air distribution revenue increased 4.9 percent year over year to €806.8 million in the third quarter, which Borg said was driven by increased revenue per booking "primarily resulting from positive pricing effects from renewals, new agreements and inflation." For the first nine months of the year, air distribution revenue totaled €2.4 billion, up 0.6 percent year over year.
On a regional basis for third-quarter air bookings, Amadeus noted that each region had improved compared with the second quarter, though bookings were down year over year in most. Unsurprisingly, the biggest percentage drop was in the Middle East and Africa, down 3.4 percent year over year, and Latin America bookings were down by the same rate. Bookings in the Asia/Pacific region declined 1.7 percent year over year in the third quarter, and North America bookings were down 0.8 percent.
Europe, however, returned to growth in the quarter, with bookings in Western Europe up 1.4 percent year over year and bookings in Central, Eastern and Southern Europe up 1.3 percent year over year.
Borg said Amadeus currently has about 80 New Distribution Capability contracts, with about half of those currently live. She said the share of NDC bookings among bookable inventory "is still in the low teens, but it's progressing and growing very actively month on month and quarter on quarter."
Amadeus' total group revenue increased 6.4 percent year over year to €1.7 billion in the third quarter. Air IT solutions revenue increased 6.5 percent year over year to €645.2 million in the third quarter, which the company said was more moderate compared with the prior quarter due to the timing of implementations for airport IT, including some work that was delayed due to the situation in the Middle East.
The highest quarterly growth was in hospitality and other solutions revenue, up 10.8 percent year over year to €288.7 million. Amadeus reported both hospitality and payments had strong growth in the quarter, with hospitality propelled by double-digit percentage growth of customer implementations of its central reservation system and hotel distribution.
Amadeus reported a profit of €381.4 million in the third quarter, up 5.7 percent year over year.
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