Amadeus Takes Full Ownership Of French Distribution Company - InformationWeek

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12/31/2004
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Amadeus Takes Full Ownership Of French Distribution Company

Amadeus Global has purchased Air France's 66% stake in the company for about $116 million.

Amadeus Global Travel Distribution SA, which runs one of the world's largest travel reservations systems, has taken full ownership of Amadeus France SNC, its French marketing and distribution arm. Amadeus Global said Thursday it has purchased Air France's 66% stake in the company for about $116 million.

Amadeus Global CEO José Antonio Tazón said in a statement that the move will let Amadeus consolidate its presence in France, considered one of the company's most strategic markets.

Amadeus has a network of marketing and distribution companies that act as its front-line presence in many countries, marketing Amadeus's products and services to travel agencies, and providing agencies with customer service, training, and help-desk facilities. The companies are typically run independently, with Amadeus owning some piece of the business.

But that's not its strategy in all markets. In 2002, Amadeus bought outright ownership in its marketing and distribution arms in Germany and Scandinavia. The company says taking full ownership of those partners has made it easier for travel agencies and suppliers to do business with Amadeus. "As we have seen in these markets, the consolidation of our marketing and commercial operations results in substantial benefits for our customer base," Tazón said in the statement.

But Forrester Research analyst Henry Harteveldt says the benefits to Amadeus customers are minimal. The logic of such consolidation rests, says Harteveldt, in allowing Amadeus to improve its operations by removing a layer of intermediaries. "It allows Amadeus to have greater control and get rid of unnecessary inefficiencies," he says. "It's a sensible move."

Amadeus' travel distribution system is used by more than 64,000 travel agency locations worldwide to book reservations. The system provides access to airlines worldwide, 52,000 hotel properties, 45 rental car companies, and ferry, rail, cruise, tour-operating, and insurance companies. The company also sells a suite of IT systems for airlines, ranging from sales and reservations to inventory management and departure control.

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