Air Transport World

A deal they could refuse. (Amadeus, Electronic Data Systems and System One announce joint venture)

Finally--maybe--after years of dancing with one another, CRSs Amadeus and System One, and systems integrator Electronic Data Systems announced an agreement in mid-December to marry their talents in a joint venture supposedly limited to North and Central America. The deal, while wiping out System One as an independent entity, would boost Amadeus's chances of challenging competitors Sabre, Galileo and Worldspan. It also would strengthen all three partners for the expanding battle over travel information and distribution.

But don't count on anything just yet, nor that this will be all there is to the combination. Consider the following factors: First, the announcement was of "an agreement designed to lead to a joint venture." The companies were still finalizing contract details, scheduled to be completed any day now. Also, Amadeus has gone through this before, when it said it wanted to team with Sabre several years ago. That project died almost as soon as it was made public. Then, too, until quite recently, Worldspan also was talking to System One.

Moreover, resolution of Amadeus's ownership lies in the background. Two of its three owners, Air France and Iberia, are in the deepest of financial holes. Both have threatened to sell their pieces. Whether the threats are bargaining chips or serious ideas, they have occurred as Amadeus attempts to attract new investment, preferably from telecommunications companies. It causes potential investors to wonder why the two owners would want to sell Amadeus just as it supposedly is turning the profit corner. …

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