Amadeus Buys Into Low-Cost Carriers With Navitaire Deal

Amadeus IT Holding SA on Wednesday said it agreed to pay $830 million for Accenture PLC's Navitaire unit, giving the Spanish travel technology provider a bigger foothold in the low-cost airline market, notably in Asia.

Madrid-based Amadeus and rival Sabre Corp. link ticket sales between travel agents and airlines and provide outsourced services such as reservations and crew-management systems. They have been courting low-cost carriers that are expanding to attract higher-paying corporate travelers.

The planned deal comes a month after Deutsche Lufthansa AG reignited a long-running battle between airlines and travel intermediaries such as Amadeus by proposing a surcharge for passengers that book through such global reservations systems.

Minneapolis-based Navitaire provides outsourced technology services to around 50 airlines, mainly low-cost carriers such as Ryanair, AirAsia and Brazil's Gol. These include ticket reservations, revenue management and frequent-flier programs. Amadeus mainly serves larger legacy airlines.

Amadeus has expanded through acquisitions to tap the faster-growing hotel reservations market, and has focused on expanding its IT services business for airlines, which have looked to drive more sales through their own websites rather than the big computer reservation systems.

It plans to keep Navitaire separate from its existing Altea products focused on full-service airlines. The company said in a statement that the proposed deal is expected to close in the fourth quarter and would have a minimal impact on its 2015 financial performance. It will take on around 550 Navitaire staff, including the senior management team.

Accenture and Amadeus also said they are forming a strategic alliance to provide airlines with outsourced IT services.

Sabre earlier this year paid $411 million to take control of Abacus, another Asia-focused airline-reservation and travel-services provider.

Write to Doug Cameron at [e-mail]

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