Amadeus has seen a strong start to financial 2023 as the global travel industry continues to regain altitude.

Having taken some difficult decisions during the past three years of pandemic disruption, the technology innovator is now well placed to reap the rewards.

Speaking to Breaking Travel News, Till Streichert, chief financial officer with Amadeus, reveals a return to financial health was the result of this long-term planning.

He explains: “Amadeus has seen a remarkable improvement in our financial results, as you can see, and today we are not far away from where we were in 2019.

“Since I joined Amadeus, in July 2020, right in the middle of Covid-19, we have done a lot of work in terms of optimising our cost structure.

“This was difficult work, especially at that time, but today it has given us operating leverage from which we are still benefitting.”

Streichert argues, while there is no doubt the pandemic posed unique challenges, Amadeus is now positioned to ride the return of optimism in the market.

“Our ambition was to come out of the crisis stronger: this was a ‘black swan’ event, with deep disruption across the whole industry,” he explains.

“Having worked on the cost side, we have since continued to prioritise investment.

“In 2022, we virtually reached the levels of research and development (R&D) investment we achieved in 2019, and over the first six months of 2023, we have seen a further 20 per cent growth year-over-year.

“We are working toward a figure of €1 billion in R&D investment for 2023 – this is the investment envelope we are aiming for.

“In the longer-term, this will leave us in a stronger position.”

Amadeus is beginning to see the dividends of this investment, winning new customers, especially in the aviation sector.

Streichert explains: “During the crisis, when it was about survival and cash management, which is now fortunately behind us, we were able to support our customers.

“In turn, this has won us new relationships and market share.

“On the airline IT side, we have announced deals with Etihad, ITA, Hawaiian Airways and others; all of these we have won over the past 18-24-months and in some ways are a prove point of our success.”

At the centre of the travel ecosystem, it matters to the whole industry where Amadeus invests, with decisions having an impact across the sector.

Streichert reveals the company understands this role, working to support the industry.

“When it comes to investment, a large part of our investment is dedicated to product evolution.

“There is a need to evolve, and there always will be: this is technology and the nature of what we do.

“A quarter of our R&D investment then goes toward customer implementations – as we win customers, we integrate them into our systems.

“We are working to support our partners and the entire industry in terms of their IT solutions.

“The remainder then goes to our internal projects, and our three main areas of focus this year are air IT, hospitality and the ongoing migration to the cloud alongside our partners at Microsoft,” he says.

Against this backdrop, Amadeus is working to evolve its position in the industry, developing greater insight across the whole passenger journey to ensure a seamless experience.

Streichert says: “Amadeus will always have room to grow, both horizontally, in terms of hospitality, payments and other areas, but also, importantly, deeper.

“Form a vertical point of view, too, there are advantages the more we understand about the traveller.

“Taking Outpayce as an example, we gave renewed focus to payments.

“We have worked closely alongside airlines in this area, for example with the merchant gateway and Amadeus B2B Wallet, but we are looking to extend our involvement within the value chain of the payments ecosystem.

“This allows us to offer things like virtual prepay cards and account transfers.”

He adds: “Our vision is a seamless experience for everybody who is in the travel ecosystem – be that the travel agents who want to pay, or the traveller who wants to visit the check-in counter to pay for extra luggage.

“Amadeus has a strong view on a platform model – and this is where we are working to strengthen.

“We believe that the assets we have are transferable across the travel ecosystem.

“Think of the example of biometrics data, which we today use for boarding, but we can use this to enhance other parts of the travel ecosystem.

“This is why we believe the platform concept is a strong one, allowing us to expand horizontally, but also vertically.”

Signed in 2021, Amadeus’ partnership with Microsoft was a leap of faith for the company during the darkest days of the pandemic, but one that has paid dividends.

Streichert continues: “Our partnership with Microsoft preeminent, but it is not exclusive, we work with Google and Amazon Web Services too.

“With Microsoft, there are two distinct strands.

“The first is moving to the public cloud, which allows us to offer capacity on demand to meet the needs of our partners.

“This means we can improve resilience and scalability, while we are also able to work with customers on topics such as data localisation and reduced latency.”

He adds: “The second strand is the co-innovation alongside Microsoft, and I think this is an area where we are seeing strong results.

“We are able to complement their strengths, leveraging our own, to make travel seamless – and a great example of that is Cytric Easy.”

Since the launch of ChatGPT late last year, the possibilities around artificial intelligence have never been far from the headlines, but Streichert argues it may take time for the full value to be revealed.

“AI is an opportunity for Amadeus and one that is going to be pretty important moving forward,” he says.

“We currently have a taskforce which is working to allocate resources to this area to see how we can best invest.

“However, it is early days for everyone.

“There are some key areas where we can benefit – a lot of travel comes down to inspiration and we see great potential in the search phase.

“Having access to the data can make that a lot more effective.

“When it comes to ‘on trip’ there are definitely ways that AI can improve that experience.”

He adds: “To effectively use and train AI models, you must have access to data, and I believe this is a real strength for Amadeus.

“Through the GDS, payments information, air IT, hospitality data or the distribution platform, we have a rich data pool which can be deployed to create meaningful AI solutions.

“Of course, other IT providers would be in a similar position, but I would argue they could offer niche coverage of certain areas of the industry, while we have pretty rich data across the sectors.

“In terms of financial impact, it is early days.

“We often see at the start of innovation trend a little hype, things are overestimated in the short run, but, in the longer-term, they are then underestimated.

“This is an area ready for a great deal more evolution.”

Finally, sustainability is a focus for Amadeus as the company returns to something like equilibrium.

Here Streichert is clear the company has a dual role to play in driving the industry toward net zero.

“Amadeus is working in two ways, both internally, and then to support the wider industry, externally.

“Internally, our data centre is carbon neutral, which was an important step, while we are working to offer travellers transparency.

“This is related to what we are able to display on the GDS and through distribution channels.

“Ideally, you can show the carbon impact of individual aircraft, giving passengers visibility over their journey. 

“At the same time, we are refining our solutions to optimise travel, whether that is a sequence manager for departing aircraft or weight optimisation tools for aircraft, everything around the flight operations to reduce fuel consumption.

“We need to play our role and we are working, through a venture fund, to pioneer and promote new technologies.

“For example, we have taken stakes in Chooose and Caphenia. 

“We do play a role, we need to play a role and we will continue to play a role wherever we can,” he concludes.

More Information

Find out more about Amadeus in the official website.