Amadeus Officially Snares Star IT Contract, Secures UAL Content
The Star Alliance today officially named Amadeus as the builder of a cross-alliance, next-generation technology platform for passenger service systems, after months of speculation that the Madrid-based travel IT company would win the business. United Airlines, which currently uses Cendant Corp.'s Galileo for much of its IT needs, and Lufthansa German Airlines will "replace their own legacy IT systems" while other Star members plan their participation.
As part of the agreement, United Airlines in the North American market agreed to provide full content to Amadeus' travel agency subscribers through the end of 2006, according to Amadeus.
Seen as one of the largest IT projects in aviation-industry history, development of a common platform initially for United and Lufthansa will begin in earnest next year--though some preliminary work already is underway--with targeted completion in 2008. Dubbed Altéa and already fully or partially in place at such other international carriers as British Airways and Qantas, the platform covers reservations systems, pricing calculations, ticketing, flight schedules and availability, customer databases, inventory, revenue management, departure control, passenger checkin and rebooking.
According to Peter von Moltke, senior vice president of Amadeus' Airline Business Group in North America, the common system will allow participants to automate many processes, consolidate disparate databases and more easily integrate new alliance members. It also would support more advanced revenue management systems and new airport technologies, including remote customer service devices.
"Altéa was built with the intention of being the platform for airline alliances," von Moltke said. "The compelling push to make an alliance a seamless experience for the passenger--what we all have been hearing about for a long time but are still waiting for it to happen--will only become a reality when all partners are on a common IT platform."
The Amadeus deals with the two carriers will run for 15 years. Von Moltke said Amadeus expects to sign the bulk of the other Star Alliance members "in the very near future. The business benefits of joining are just so significant that it would not make sense for an alliance member to retain its own independent systems, in the long run."
US Airways, the other North American Star Alliance member, is focused primarily on the planned merger with America West Airlines and has not committed to the common platform. "We will continue to monitor the progress of this initiative, but have not made any decisions to participate at this time," said a US Airways spokesperson.
Meanwhile, as Amadeus positions itself as a technology partner to United, von Molkte said there are other new aspects to the overall relationship, including a full-content distribution commitment in North America and cooperative marketing programs.
He also did not dismiss the challenges faced by carriers switching hosts: "This is a major undertaking. Though there always will be issues and problems with any migration, we are 100 percent confident we can handle this, based on our experience and the planning."
For its part, Cendant said it "will continue to host United according to the current contract terms," and that Star's announcement was expected.
"Cendant Travel Distribution Services does not consider legacy carrier hosting to be core to our business nor is it an area of growth for us," the company said in a statement. "We were involved in the request for proposals process for the Star Alliance common platform and withdrew for business reasons. Meeting the requirements of the Star RFP would have required Cendant to invest hundreds of millions of dollars, while at the same time Star carriers are expecting to receive significant cost reductions."
Instead, Cendant is focused on implementing its own new-generation hosting platform. Its Aires product targets low-cost carriers, including "a leading low-cost carrier in North America" that would be identified next week as a launch customer.
Meanwhile, Cendant said its overall relationship with United will not end in 2008, as it "goes far beyond reservation hosting" to include travel packaging technology and preferred partnerships with Cendant subsidiaries CheapTickets, Orbitz, Lodging.com, Avis and Budget. "We continue to build, in tandem with United, the new Internet booking engine for United.com, slated to be launched in mid 2006," Cendant said. "We are also in the process of developing a new corporate portal for United."