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July 14, 1987

ON THE EURO RESERVATIONS ACT

By CBR Staff Writer

In light of the fact that the British Airways Plc consortium that includes KLM Royal Dutch Airlines and Swissair has invited United Airlines to join its reservation systems party (CI No 722), it is ironic that it was the threat from the two US giants of the business – United’s Apollo and American Airlines’ Sabre – that triggered off the tidal waves crashing through the European airline business in the first place. Air France, Scandinavian Airlines System, Lufthansa and Iberia agreed to dump their Unisys 1100-based reservation systems in favour of a shared IBM-based system to be called Amadeus because they feared that the two US systems were on the brink of a breakthrough in Europe that would steal away much of the lucrative ancillary travel booking business – hire cars, hotel rooms and so forth. Many Europeans had hoped that the threat would lead to the creation of a single European system, but the airlines are now firmly in two camps and there is little likelihood that the Amadeus group and the as yet unnamed British Airways consortium will be prepared to throw in their lots together. And now it is the American Airlines Sabre system – almost twice the size in terms of annual transactions of the United Apollo system – that fears being left out in the cold, and American is now wooing the Amadeus consortium with the offer to license rights to its reservation software. However, American’s price is believed to be a stake in the Amadeus system, and it has been suggested that the consortium is unwilling to cede this. The Amadeus group has also talked to feisty upstart Texas Air Corp about taking a licence to the software for the SystemOne reservation complex that it acquired with Eastern Airlines and wants to build up into a competitor for the US Big Two. Texas Air is believed to be prepared to sign a straight licence agreement without demanding a stake in the Amadeus system – but the Sabre software is generally regarded as more advanced that SystemOne. Amadeus is expected to make its decision next week.

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