Air Transport World

European CRS: the moment of truth. (computer reservation systems)

Unable to overcome politics and form a single CRS, Europe now has Amadeus and Galileo. But can they compete with Sabre?

Amadeus and Galileo, the two European computer reservation systems, are about to face their moment of truth. After a frenzied three years of development, Galileo has begun to deliver and Amadeus soon will deliver the first of their own travel-agent products from their own computer cores. Only after market tests, however, will the companies know whether they can compete (1) with one another and (2) with Sabre, which both regard as "the one to beat." A shift in this attitude may be coming as Amadeus and Sabre are said to be near an agreement to join forces.

At one time, there was talk of a single European CRS. European airlines felt-and some still feel-that to beat U.S. CRS companies and make some money, it would be best to merge resources. But airline politics intervened. Certain airline chief executives most important to such a venture could not stand each other. The result was Amadeus and Galileo.

Even if the two systems decided to merge efforts at this late date, as some European airlines still think should be done, it would not be easy. European Community politics, not only airline politics, would have to be hurdled. The EC is having a difficult time trying to create airline competition. Permitting a European monopoly in a marketing tool as important as CRS might be unpalatable.

Ironically, recent visits to Amadeus and Galileo point up many similarities. Both are late with product introductions. Both say that the pace of European travel-agent consolidation caught them with their strategies down. Both have experienced executive upheaval. Both now are staffed with significant numbers of nonairline employees, who disagree rather publicly with owners who still want their CRSs to protect themselves first and offer products appealing to travel agents and other distributors second.

It is on this latter point that the greatest difference arises between Amadeus and Galileo. Many people still perceive that the Amadeus structure is more oriented to protection in the owners' and partners' home markets. This perception continues even though Galileo is not free of such tendencies.

The end of August was not an ideal time to visit Amadeus. The president, Curt Ekstrom, had been ousted and the new one, senior VP Jose Antonio Tazon, had yet to come aboard. The head of marketing, Dieter Farber, had left "by mutual agreement" and now is marketing chief at Deutsche Bundesbahn, the German rail system. But the staff had plenty to do. After overpromising products and missing deadlines, it was trying to minimize the gap with the also-tardy Galileo.

Time-savings idea

Philippe Chereque, director of product definition and support, recently returned from temporary residence in Miami, the home of System One's computer. System One was software subcontractor to IBM, Amadeus's hardware provider. When the contract was signed in 1987, the idea was to tap System One's experience and build on it, thereby saving time.

It was not to be. Amadeus found IBM less than adept in managing the transformation from the U.S. software to European. But Big Blue wasn't the only holdup. There were factors such as language differences between the U.S. and Europeans and among Europeans; the fact that the Amadeus owners previously used Unisys hardware; that several different airline inventories existed and, as Farber once noted, the owners themselves changed their minds about what they wanted.

The upshot is that Chereque spent three years, not the six months expected, overseeing the adaptation. What was estimated to be a 60-70 man-year job turned into a 250 man-year effort by early 1988. Company managers now are figuring double that before a fully functional Amadeus is running.

At summer's end, Amadeus was seeing daylight. Previously, it was on line with direct access to 33 airlines and a neutral display borrowed from System One. …

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