Amadeus: The IT Backbone of Travel - [Business Breakdowns, EP.237]

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Dec 12, 2025

Ben Needham, a portfolio manager at Ninety One Asset Management specializing in travel and IT infrastructure, dives into Amadeus—an essential player in global travel technology. He reveals how Amadeus built its market dominance and tackles common investor misconceptions. The discussion touches on Air IT outsourcing, the impact of AI, and the competitive edge Amadeus holds over rivals like Sabre. Ben also shares insights on Amadeus's financial resilience, growth potential in hotel tech, and the importance of maintaining strong relationships within the travel ecosystem.

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INSIGHT

AI Won't Easily Displace The Core Stack

AI improving top-of-funnel search likely won't displace Amadeus because mission-critical booking and order management still require their infrastructure.
Amadeus' role as a content aggregator and standards bridge (NDC/Edifact) gives it resilience versus superficial disintermediation.

INSIGHT

Low Take Rates, High Volume Model

Revenue is mostly transaction-based: roughly €1 per passenger for Air IT and €6 gross (€3 net) for distribution bookings.
The model is variable with volume but inflation-linked fixed contracts in Air IT provide defensive revenue in downturns.

INSIGHT

Net-Fee Mechanics Protect Economics

Distribution uses a net-fee model where airlines pay the GDS who then pays agencies, so net economics are lower than gross fees.
NDC rollout hasn't materially diluted net fees and contribution profit per unit has risen over time.

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Today we are breaking down Amadeus, the dominant infrastructure powering global travel bookings. If you've used a travel agent or corporate booking system, you've likely interacted with Amadeus's technology—though most of what they do happens behind the scenes in airline operations, hotel inventory management, and logistics coordination.

Ben Needham, portfolio manager at Ninety One Asset Management, explains how Amadeus built its market-leading position, common investor misconceptions about the business, and the company's value proposition across the travel ecosystem. We also explore AI's potential impact on the industry and how Amadeus's balance sheet strength positions it relative to competitors. Please enjoy this breakdown of Amadeus.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page⁠⁠⁠⁠⁠⁠ here.⁠⁠⁠⁠⁠⁠

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Show Notes

(00:00:00) Introduction to Amadeus

(00:02:49) Understanding Amadeus' Business Model

(00:04:11) Amadeus' Market Position and Competitors

(00:05:35) Historical Background of Amadeus

(00:07:25) Revenue Streams and Profitability

(00:10:50) Impact of AI and Technology on Amadeus

(00:13:07) Revenue Models and Pricing Mechanics

(00:22:35) Growth Opportunities and Market Dynamics

(00:25:47) Execution and Future Prospects

(00:30:01) Financial Health and Capital Allocation

(00:31:57) Valuation and Market Perception

(00:34:21) Risks and Challenges

(00:37:13) Lessons From Amadeus