Global distribution system (GDS) provider Amadeus has taken a 16.7% stake in Opodo for €49 million, the online travel site owned by nine European airlines.
The move comes ahead of a much anticipated consolidation in the European online travel sector, which Amadeus expects to grow from €4.2 billion in 2001 to €20.6 billion in 2006. "The market is rapidly hardening and we would like to be there," says Amadeus. The GDS provider says the reasons behind its decision to invest are both strategic and financial. Opodo already uses the Amadeus online booking engine e-travel plantigo, for which Amadeus receives a booking fee and a software licence fee per booking. The GDS supplier has invested in a number of travel websites, providing a presence in markets ranging from Australia to Latin America, and has a top 10 position in the USA through onetravel.com. In Europe, it has a presence in France, Italy, and the Iberian peninsular. Opodo has quickly established itself as a leading online travel player in Europe, with dedicated sites in Germany, France and the UK, and plans to open sites in other European markets. Opodo also provides a link between Amadeus and airlines that do not use its GDS system at the moment but sell tickets through Opodo, such as Aer Lingus and Cathay Pacific.
Amadeus says there was "a very cogent argument" for investing in Opodo. "This allows us to be at the forefront of the online travel market." The company stresses that it does not see the online travel market as a primary business line. "We are still providers of technology," the company stresses. "We are not going to be selling travel online." Even if an opportunity arose to take a majority stake in Opodo, Amadeus says it will not take it. This represents a different strategy to competitor Sabre, which owns 100% of travel website Travelocity.
Intriguingly, Air France, Iberia and Lufthansa have shareholdings in both Amadeus and Opodo. The three each have a 25% stake in Amadeus, with Air France and Lufthansa holding 19.05% stakes in Opodo, and six other European carriers sharing the remaining 26.15%. Amadeus insists that the overlapping ownership did not affect the decision to invest in Opodo
Source: Airline Business