Aviation Sector Technology Reaches a New High Altitude
Growing collaboration among market participants, particularly evident in the increasingly widespread adoption of IATA’s New Distribution Capability (NDC) framework, underscores continued progress in moving from legacy systems to next-generation technologies. Large airlines have been increasingly willing to experiment technologically, moving away from antiquated systems that provide stagnant profits. Examples include digital recognition technology, virtual passports, automated border gates, and robotic kiosks. These trends have also been manifest in the mounting number of M&A transactions in the space. Throughout the first half of 2017, Pharus has observed increased consolidation within the aviation technology sector; this acquisitive environment has largely been fueled by the potential for adding new sources of revenue and reducing ticketing transaction costs, as well as the falling cost and growing sophistication of big data analytics in planning, operational, marketing, and other functions.
One of the most notable transactions of 2017 occurred on February 16, when Vitruvian Partners acquired OAG, a web-based provider of historical and future airline schedules, ticketing and general travel industry information. The transaction values OAG at $215M. OAG’s digital solutions provide unprecedented insights into airline performance. With its large customer base and extensive network of air travel data, the company has recently experienced unprecedented growth.
On August 3, PROS acquired Vayant Travel Technologies, a privately held flight-search technology vendor. The transaction values Vayant Travel Technologies at $35M. The acquisition will augmeznt PROS’ artificial intelligence-based dynamic pricing and revenue management tools.
On July 5, Luminate Capital Partners invested in Comply365, a provider of enterprise content management solutions for the aviation sector. Comply365 provides a mission-critical, mobile-first content management software platform that provides pilots with access to the most up-to-date and compliant manuals and notifications electronically.
On July 3, DigitalTown acquired Comencia, a provider of global travel affiliate solutions. Comencia’s technology software equips any publisher with the ability to turn their site into a travel search portal, enabling the effective monetization of traffic while maintaining brand integrity.
On April 24, Gentrack Group acquired Blip Systems, a provider of passenger flow, line prediction, and capacity forecasting software for the travel sector. The acquisition was aimed at augmenting Gentrack’s product range and expanding its customer base worldwide.
On February 4, Mercator acquired Accelya, an airline services company aimed at managing costs. The combined business will provide accounting, audit, and other financial services, making it a competitor with the world’s four largest travel tech companies, Amadeus, Sabre, Travelport, and Travelsky.