Amadeus to acquire controlling interest in Opodo

MADRID -- As yet another sign of further consolidation of the European online travel market, Amadeus announced today that it will acquire a controlling 55% stake in Opodo, the pan-European online travel service, with a €62 million cash injection. Opodo is an online travel service created by nine of Europe's leading airlines. Opodo will remain as an independent entity, according to the announcement.

Formed after and somewhat similar in structure to Orbitz in the US, Opodo addresses "the real needs of today's traveller by offering an unbiased and competitively priced online travel service for world travel" by offering consumers access to flights from over 400 airlines, 35,000 hotel properties 7,000 car hire locations, package holidays, city breaks, lifestyle holidays, ski deals, comprehensive travel insurance and value added services such as airport parking.

"While Amadeus will continue to focus and invest in the traditional and core distribution business, we are equally committed to extending new business lines that will expand our existing potential and support our aim to be the technology partner at the heart of the travel industry," said José Antonio Tazón, president and CEO of Amadeus. "We believe in the future of both traditional and new channels and our strategy reflects our commitment to the success of our customers in each of them."

Launched in 2001

Opodo launched its first site in Germany in November 2001, its UK site in January 2002 and its French site in April 2002. According to Nielson NetRatings, Opodo quickly gained market share and within two months of launch each site was ranked within the top three most trafficked travel sites in each market.

Last month in London in a keynote address at EyeforTravel's European Travel Distribution Summit, Opodo CEO David Scowsill said, "There will be further consolidation of the online travel industry and it is inevitable in Europe the Pan-European companies will be the winners. Pure nationals will operate in niches, but cannot play globally. Consolidation, for both the leisure and corporate travel players, has been the name of the game over the last 12 months, as we have seen a spate of acquisitions and mergers and the US."

(See: Text of speech by Opodo CEO David Scowsill.)

The shareholdings of Opodo's nine existing airline owners will reduce in proportion to their current stake. Assuming regulatory approval, Opodo's ownership structure will be Amadeus 55.4%, Air France 10.3%, British Airways 10.3%, Lufthansa 10.3%, Alitalia 4.1%, Iberia 4.1%, KLM 4.1%, Finnair 0.8%, Aer Lingus 0.5% and Austrian Airlines 0.5%.

Through this agreement to acquire the controlling interest, Amadeus said it intends to strengthen its position in both the online and leisure travel arenas, which increasingly offer significant growth opportunities in the travel industry.

Rapid industry growth

The online travel industry, in which Opodo is a key player, is experiencing rapid growth, particularly in the leisure sector. Amadeus cites industry statistics indicating the European online market is forecast to show an average annual growth rate of 39% between 2002 and 2008, following the pattern of the US market where online sales today represent over 30% of air travel bookings.

As one of the leading online travel portals in Europe, Opodo has 18& market share in online travel agency air bookings across the three markets in which it currently operates (France, Germany and U.K.). It reached its millionth air booking in November 2003, averaging over 10 million site visits per month.

"Amadeus is an ideal owner for Opodo as we are ready to make the necessary investments to take Opodo to the next level of success, with the technological expertise and knowledge to make this a reality. By optimising content and channels we intend to take advantage of the opportunity of leisure growth", said Philippe Chérèque, senior vice president for corporate strategy at Amadeus.

Technology provider

Amadeus is a key technology provider for Opodo and has held two seats on Opodo's board since April 2003. This deal represents an evolution of Amadeus' online joint venture strategy which commenced four years ago. Amadeus has built its presence in the online travel industry through investments in several Internet travel companies around the globe including Rumbo and Travellink, the leading portals in Spain and Scandinavia respectively. In addition to its distribution business, Amadeus is a key provider of e-commerce solutions and IT platforms for airlines and travel providers.

"We are confident that Amadeus' strong travel technology expertise and leadership make it the ideal match to take Opodo into a new phase of development and expansion. We look forward to working together to continue to build what we believe is a very promising future for Opodo," said David Scowsill, CEO of Opodo.

Through the Amadeus GDS, travel agencies and airline sales offices in over 210 markets worldwide can make bookings on more than 95 per cent of the world's scheduled airline seats. The system also provides access to hotel properties, car rental companies and other provider groups including: ferry, rail, cruise, insurance companies and tour operators.

Systems portfolio

Amadeus is a leading IT solutions provider to the airline industry, providing a customer management systems portfolio, including: Altéa Sell (distribution), Altéa Plan (inventory management system) and Altéa Fly (departure control system). British Airways, Qantas and Finnair are the first customers to implement these solutions. e-Travel, Amadeus' e-commerce business unit, is the global leader in online travel technology and corporate travel management solutions.

Amadeus is headquartered in Madrid, Spain, and quoted on the Madrid, Paris and Frankfurt stock exchanges. For the year ended 31 December 2003, the company reported revenues of EUR 1,929m and net income excluding special items of EUR 158.4m. The Amadeus data centre is in Erding (near Munich), Germany and its principal development offices are located in Sophia Antipolis (near Nice), France. The company has 5,000 employees worldwide.