Amadeus Capitalizes On Airline Services With Open Source

Adoption of open source code is a key competitive factor, InformationWeek says in this week's issue. If you don't agree, then consider the case of Amadeus, the big European travel technology company, which competes -- successfully -- with Sabre Holdings, Galileo, and Worldspan.Amadeus says the right open source code -- not just any open source but a great fit to its systems -- is critical to its future. So much so that it believes it can adopt more open source code and gain competitive advantage over its key rivals.

One of the surprising moves it's considering is migrating from some of its Oracle databases to EnterpriseDB, a commercially supported version of open source PostgreSQL.

When Amadeus adopts open source code earlier than its competitors, "There's a huge advantage to us. The benefit is immediate" in the form of more efficient message and transaction processing, says Eberhard Haag, senior VP of Amadeus operations.

As the booking of airline and hotel reservations moves from agent offices to the Web, the number of transactions involved goes up. Amadeus in 1996 processed 25 transactions per booking; now the number is more like 150, as online shoppers seek information on flights, compare prices, and work step by step toward a flight reservation.

Such increased demands would theoretically drive up the cost of systems to support each airline reservation, but Haag says his firm is beating the odds with open source code.

Many of the usual suspects can be found in Amadeus' open source portfolio, especially Linux, the Apache Web Server, and MySQL database. Amadeus has a lot in common with Sabre Holdings in that respect. Both rely on those three to serve up information to online ticket shoppers. But Amadeus also is a supplier of back-office IT systems to airlines for such things as flight scheduling and inventory systems. Its systems process a total of 8,000 messages a second, 280 million transactions a day. If implementing open source code drives down the cost of each transaction by a penny or a fraction of a penny, that drives revenue to the bottom line. "We are charging airlines based on how many passengers are boarding, not how many transactions are involved in the ticket sale," Haag says. After Sept. 11, 2001, airlines learned how fickle airline travelers can be, as ticket sales plunged and scheduled flights flew with as many seats empty as full.

By charging per boarded passenger, Amadeus has made its booking services more attractive to the cyclical airline business. "If revenue is going down, they pay less to Amadeus. That's very attractive at this point to the airlines," he says. Amadeus' open source booking systems serve 70 airlines and 250 travel Web sites, including Air France, Lufthansa, Qantas, Aeromexico, Finnair, and Air Canada.

Amadeus has a team of software experts hunting for and testing promising open source code so that the firm may adopt it before competitors. A crucial part of the process is thoroughly testing the code before it's put into production.

Amadeus is intensely interested in EnterpriseDB for its ability to run Oracle applications and ingest data migrated from Oracle. "Our competitors are not as far along in migrating their legacy systems to open source," says Haag. And he thinks that's the key to more business for Amadeus.