Investors take flight from Amadeus after Lufthansa clash

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Shares in Amadeus fell as much as 10 per cent on Wednesday after Lufthansa lashed out at the business model the Spanish company uses, and announced it would impose a charge on tickets not booked directly through the German airline group’s own websites.

Lufthansa revealed on Tuesday that it would enforce a €16 charge on any bookings made through Amadeus’ computer reservation system, which links travel agencies and airlines.

The move by Lufthansa highlights the tensions between airlines that operate their own online booking platforms and the so-called global distribution systems including Amadeus, Sabre and Travelport that bring the carriers passengers but slice off commission fees.

These three companies have capitalised on the rise in air travel, but their business model is coming under pressure in some quarters because airlines are increasingly focused on selling tickets directly to customers.

Jack Diskin, analyst at Goodbody, said: “The fear is that the Lufthansa [move to charge] becomes replicated by other airlines which use [global distribution systems’] services.”

Shares in Amadeus closed down 9.7 per cent at €37.36, the biggest fall in more than five years.

Lufthansa said global distribution systems cost it “a three-digit million euro amount” every year. The company lashed out at what it called the high cost premium of such services.

Jens Bischof, Lufthansa’s chief commercial officer, said the €16 charge was designed to combat the continuous decline in the proportion of revenue the group generates from selling tickets.

“While other service and system partners in the value chain are recording increasing margins and returns, our airline’s earnings have been compromised over time,” he added.

Amadeus said it was unlikely that other airlines would follow Lufthansa’s introduction of the €16 charge, as the Spanish company had a stable relationship with the other carriers. Amadeus manages transactions between customers and more than 400 of the world’s airlines.

It added that rather than hurting the number of passengers booking through its systems, the €16 charge would actually result in fewer travellers taking Lufthansa flights because the airline group would be less competitive.

Lufthansa is one of the companies that founded Amadeus in 1987 along with Spain’s Iberia, Air France and the Nordic airline SAS.

“This whole trend of bringing services to airlines benefits them,” said Decius Valmorbida, vice-president of distribution at Amadeus.

“Customers like to compare, and the more you create obstacles for those comparisons, it interferes with fair competition.”

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