Specialist
Executive at a global aviation carrier
Agenda
- Outlook for carrier PSS (passenger service system) spending growth
- Competitive dynamics across Amadeus (MAD: AMS), Sabre (NASDAQ: SABR), SITA and other vendors
- Procurement trends and vendor selection criteria
- Pricing trends – volume-based and recurring SaaS revenues
- Adoption drivers for NDC (New Distribution Capability) merchandising solutions
Questions
1.
How are airline IT requirements evolving? What’s becoming more important for airlines as we look ahead?
2.
How should we think about the mix across the industry in terms of insourced vs outsourced IT departments? Obviously there are some very big carriers, such as Lufthansa, who have a huge onshore IT team, and clearly others have gone down the route of outsourcing. How do you see this mix playing out?
3.
How quickly is the level of airline IT spend growing? How do you think about the level of spend relative to 2019 or pre-pandemic?
4.
When thinking about where the PSS [passenger service system] spend sits within the mix you mentioned, of two-thirds infrastructure and one-third projects and applications, I assume it’s in the one-third bucket. Is this correct?
5.
How much do you think airlines might spend on the PSS relative to the other areas you discussed?
6.
Is there a trend towards the price per passenger moving down over time, or is it possible to move the price per passenger up over time if you’re hanging additional modules onto the PSS? Or is that priced completely differently, separate to the price per passenger?
7.
I’m trying to think around what goes into the price per passenger boarding, because when a lot of people look at Amadeus specifically, they look at the number of passengers that are boarded, because the company obviously gives you that number, and then it takes the IT segment revenue and calculate a price per passenger. Is that how it works, or will the airline have a separate agreement for the revenue management system, the website?
8.
Outside of the core PSS, what are the other most interesting areas in terms of outsourcing?
9.
Why is Amadeus pulling away?
10.
How would you compare Sabre and Amadeus specifically in terms of their proposition? This is the decision the carrier is making, “Should I go with Sabre or Amadeus?” and there’s not really anybody else, at least if you’re a large full-service carrier.
11.
Who are the providers in the LCC [low-cost carrier] space, typically?
12.
Do you think Sabre’s partnership with Google changes the perception around Sabre’s lack of investment in its product, or is there any evidence that’s coming through in terms of the product?
13.
Do you think Amadeus will continue to displace or take market share from Sabre?
14.
Do you think Amadeus’s focus will be on upselling existing PSS customers, or would the company go after Sabre?
15.
As airlines take on new IT projects, so revenue management, dynamic pricing, NDC [New Distribution Capability] merchandising, whatever it may be, do you see that IT spend as a percentage of revenue ever moving up over time, because these are entirely new areas of IT spend now?
16.
Do you think the airline IT segment within Amadeus is going to be more important than distribution in five years, given some of the trends you outlined? Obviously, distribution benefits from some of that macro you spoke to on the volume side.
17.
Would you expect Amadeus’ IT segment to grow more quickly than the market, just as a result of taking greater share of wallet?
18.
Do you think the trajectory of growth we’ve seen on the airline IT side for Amadeus or the IT industry more generally is sustainable? It sounds as though the transition has happened.
