18 June 2008

Singapore Airlines signs for ALTEA/CITP

SQ signs for ALTEA/CITP. Another expected result as the Singapore based carrier had signed for exclusive negotiation status. SQ joins a very long list of carriers ditching their current own internal systems for Amadeus’s current Airline portfolio of products. This is not a good situation for the industry. Setting aside the questions of Amadeus and its ability to meet the market’s needs, I firmly believe that the commercial model for these airlines outsource contracts will come back to bite significantly. There will be blood. Not this year, probably not even next – but in future years.

Interestingly the early PR waffle did not specifically state CITP.

One of the issues I believe will come back to haunt Amadeus is the variants of the system that they will have to support. When the product is finally released there will be a lot of disappointed airlines who will lose functionality in the early time periods until their custom code is delivered.

Still you have to hand it to Amadeus for gaining this momentum. It will look good when they come to IPO. However it will be a huge rod to beat up the client base. The airlines will now come to realize they have replaced one cost monster (aka the GDS companies) for an even more voracious and controlling one. The airline lemming model is alive and well.

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