Yahoo Finance Amadeus Buys Airport Self-Service Baggage Firm to Diversify Further
Passengers who have used the self-drop baggage machines at airports like London’s Heathrow, Paris’ Charles de Gaulle, or Singapore’s Changi have unknowingly used the automation equipment of ICM Airport Technics, a Sydney-based tech company that whimsically stands for Innovation Creating Movement.
Amadeus, the Madrid-based tech giant, said Thursday it had bought the small company to bolster its services for airports. The companies didn’t say how much Amadeus paid in cash.
Amadeus gets the majority of its revenue from helping airlines distribute their tickets to agents, but it has been diversifying into other technology services, and it sees the ICM deal as a way to bolster its tech services for airports.
During an earnings call with analysts last month, Amadeus said it wanted to expand its small sales of airport information technology services. At the time, only 115 airport operators and 34 airlines used Amadeus’ airport information technology tools. ICM’s self-service bag drop solution is applied at 25 airports worldwide, though there may be some overlap.
The deal is a yellow flag for SITA, a Geneva-based organization owned by the air transport industry that is formally Société Internationale de Télécommunications Aéronautiques. SITA has invested heavily in airport information technology services including luggage automation with its Scan&Fly bag drop technology.
“Airports tell us they don’t want to have to work with multiple suppliers but rather single providers that can harness the best of the very latest technologies and who ultimately can ‘do it all,’” said Bruno Spada, head of airport IT at Amadeus, in a statement.
The deal is good news for Investec, a specialist banking and asset management group, which in 2014 had taken a majority investment in ICM for an undisclosed amount. Investec helped install Richard Dinkelmann as CEO in 2016 and retrofitted the business model and processes of the company. Investec helped ICM acquire a smaller rival with similar tools, Vedaleon Technologies, for an undisclosed amount, in 2016.
ICM brings Amadeus some tech innovation. The firm has worked with Qantas to offer permanent baggage tags to members of the airline’s top-tier loyalty program, and it has experimented with biometric-based identification methods to help speed up baggage processing. While ICM was founded in 1977, it was in 2009 when it moved into the self-bag drop tech that is its core function today after Qantas commissioned it to develop the system.
Amadeus helps ICM with its customer list and also with greater savvy about business models. Installing machinery typically requires an upfront cost that can be daunting to smaller airports, but Amadeus has insights into pay-per-use models that might prove attractive to customers.
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