Heading to Grandma's house for the holidays? Travel companies are gobbling up software providers
The holiday season represents one of the busiest travel times of the year. Air travel will see the biggest increase in volume during the Thanksgiving holiday with 4.45 million Americans expected to fly, according to the American Automobile Association. With the rise of low cost carriers, airlines are competing to gain more passengers and are looking for ways to make their flying experiences standout. Travel-related technology companies that offer rewards and other services to airlines are attracting buyers.
Travel technology company Sabre Corp. (Nasdaq: SABR) has acquired airline software provider Radixx for $110 million. Radixx offers passenger service systems and Internet booking engines for low-cost carriers (LCCS).
Orlando-based Radixx, founded in 1993, was built to leverage the technology industry’s rapid advances with a focus on cloud-based airline services that can be deployed quickly. LCCs have grown twice as fast as full-service carriers over the past five years and now total nearly 30 percent of global passengers boarded annually, according to Sabre.
Radixx’s technology is designed to deliver omni-channel merchandising services that are built into the passenger system that allow airlines to maximize their revenues. Radixx expects to close 2019 with about $20 million in revenue.
“By combining Radixx technology and expansive LCC customer base with Sabre’s expertise, scale and global service capabilities, this acquisition will result in a better alternative for low cost carriers that might have otherwise felt their passenger service system and other technology options were limited,” says Sabre CEO Sean Menke. “This acquisition also allows Sabre to quickly expand its footprint both geographically and in terms of scope of service with an important and rapidly growing segment of the airline industry.” Sabre reached a deal in 2018 to buy airline technology company Farelogix for $360 million. Farelogix provides software that allows airlines to create personalized offers for customers.
Sabre is not the only company looking to increase its travel tech offerings. In 2019, Pros (NYSE: PRO) bought Travelaer SAS, a digital services firm for the airline sector that helps customers with online booking and other travel-related needs. Pros says the acquisition will help its airline clients be more flexible and improve their customer experience. Pros uses artificial intelligence to help companies price and sell their products through omni-channels.
“With Travelaer, Pros is uniquely positioned to provide an end-to-end solution that transforms the digital selling experience for airlines, from revenue management, through offer personalization and optimization, to supporting excellence in retail channels,” says Pros CEO Andres Reiner. “This acquisition accelerates our ability to deliver airlines flexible, configurable retail capabilities yielding an optimal customer experience every time.”
The International Air Transport Association predicts that passenger growth will double in the next 20 years. Pros says airlines want to take ownership of the entire travel journey by converting window shoppers into booked customers.
“To meet travelers’ changing expectations while increasing profitability, airlines need a technology partner that is ready to deliver tomorrow’s technological solutions today,” says Menke.