06 September 2010

Amadeus Retreating From Competing With Its Customers - Bye Bye Opodo?

Hot on the heels of a story I did last month on Sabre pulling out of non-core businesses and ending the practice of competing with its customers now comes word that Amadeus is doing something akin.

So either Amadeus is finally giving up on its poor orphan child that it inherited from its some times owners (big EU airlines) or its decided that Opodo needs a new home. At the least Amadeus might start to look more attractive to the big OTAs. It has recently beefed up its search offerings (Masterpricer et al).

Reports have been circulating for a few weeks of a "major OTA" on the block. Actually Opodo doesn't quite fit those shoes. Since the story is now out - I can comment on it.

Opodo has never quite lived up to its hype. It's books were made to look pretty good (ie that they were not losing money) in recent years - but it is not a business that will set the world on fire. Rather like its counterpart in Asia - Zuji that is a little more successful comparatively speaking.

The US based similar business - Orbitz - burst on the scene and became a monster success initially. It was hived off by the airlines (who started it under the code name of T2 after a popular Consulting firm of a similar name - or a movie that came out around that time with a then future Governor as its lead actor). It landed in the Blackstone stable of businesses. It seems to be getting a little more healthy under new CEO (and ex-Expedia man) Barney Harford.

Now that Amadeus has to submit to the discipline of the markets - it is taking a hard look at its stable of disparate businesses and clearly deciding that some of them belong elsewhere.

So probably time to put this dog out the door. Will Travelport now be looking to do the same on their side and dump their holding in Orbitz and some other products/services.

Hey this new found religion might actually be good for the market.


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