Amadeus, Sabre continue to rule the airline PSS market
In-house mainframe systems will likely be history in five years
Cathay Pacific Airways and Singapore Airlines migrated from their in-house mainframe systems to Amadeus Altéa; the LAN Group and Etihad left Amadeus for Sabre; Philippine Airlines and ANA moved from their in-house mainframe systems to Sabre and Unisys AirCore, respectively.
The newly constituted Virgin Australia, which now includes Virgin Blue, moved from Amadeus and Navitaire to Sabre.
In addition, several significant RFPs were issued.
The headliner in that category is Emirates, which plans to migrate off its in-house Mercator system.
That leaves the future of Mercator in doubt. “T2RL sees the winner of the Emirates PSS business as the most likely buyer for the Mercator businesses that remain,” among them a leading revenue accounting suite, the report said.
There is still plenty of room for movement in the market “for many years to come,” T2RL believes.
Twenty-six companies’ reservations systems — the chief component of passenger services systems — together accounted for fewer than 9% of passengers boarded last year. Some of these companies “have a very small number of very small customers,” the report said.
Eleven airlines that last year boarded more than 238 million passengers are still using in-house mainframe systems.
Among them are Korean Air and Asiana Airlines, both of which have contracts to migrate to Amadeus.
T2RL expects the in-house mainframe sector to evaporate over the next five years.
“The emergence of new architectures may see some of the hosted capability remaining in house, but it is unlikely that many airlines will continue with the current approach to running their own systems or through traditional outsourcing models,” the report said.
“Since the late 1990s there has been a distinct move away from in-house solutions as more airlines determine that running a major IT operation is outside their core competencies,” the report said.
The trend has been particularly strong in the U.S.: today, no major U.S. airline operates an in-house PSS.
Just three years ago, in-house systems were dominant; 2011 was the first year in which they were replaced at the top by Amadeus.
Small airlines could prove to be a good target for the right company, the report said.
“T2RL believes the market for Tier 4 airlines — those below 3 million passengers boarded — is an attractive proposition to a vendor that has a simple and rapid approach to implementation with all of the necessary functionality,” the report said.
However, it said, few suppliers seem well positioned to challenge the Top 3 providers.
Read about Sabre’s new defense in US Airways’ antitrust lawsuit in the Jan. 7 issue of TTU.
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