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Amadeus Bites Into the Hand it Feeds

[Sydney, AUSTRALIA] Australian Stock Exchange-listed travel site travel.com.au has welcomed a new investor, with Spain-based global distribution system (GDS) and technology provider Amadeus taking a 19.99 percent slice of the retailer's pie.

The $9.93 million cash investment leaves Amadeus with 10.68 million travel.com.au shares, purchased at 93 cents each. The deal finalizes and expands upon the initial investment announcement last November, by offering Amadeus the option to acquire another 4.5 million shares at 60 cents each any time in the next two years.

As part of this deal, travel.com.au has signed a five year exclusive agreement with Amadeus and its local arm Amadeus Australia for the provision of Computer Reservation Services (CRS) using Amadeus' Vista browser interface. It will be the first time Vista has been implemented outside of Europe and the U.S.

Amadeus provides reservation information from 500 airlines as well as hotels, car rental companies and similar sources to travel agencies and airline offices. The company also develops e-commerce technology to improve the booking process.

While travel.com.au has become an Amadeus user through the deal, the company stands the most through a greater exposure to the technologies Amadeus its developing around the world with its partners, said travel.com.au chief executive officer David Tonkin.

"The agreement will see collaboration between Amadeus Australia and travel.com.au, particularly in its Brisbane office and in Asia and Europe," said Tonkin. "It is not about just gaining the 'goodies' from Amadeus, but working with them to develop these 'goodies'. It will present us with global opportunities."

Tonkin expected these 'goodies' to appear in the form of "better booking systems" and in jointly investigating opportunities with Amadeus to add value to travel.com.au's joint ventures in Japan and South Africa, as well as potential in Asia Pacific.

Amadeus' investment is reflective of the company's partnerships around the world. It is working with Broadvision to develop a personalized booking system that Tonkin expected to be trialled first in the U.S., and has invested in agencies around the world. Tonkin said his company will be jointly developing solutions with a number of these, including the U.S.-based OneTravel. Tonkin said that travel.com.au would also be working with Amadeus Australia to use and possibly develop some of its travel management systems, including its recently launched Online eTravel which provides customized travel reservation systems and content for travel and portal Web sites.

Tonkin did not have a confirmed plan for the money travel.com.au has received through the Amadeus investment, saying that as the company still has money from its May 1999 float, the new injection of capital will acts a buffer and help fund opportunities it may spy in future.

Amadeus will now be seeking to nominate two directors to travel.com.au's board, following the resignation from the board of non-executive director Malcolm Spry, who is the group chief executive for the Pacific region at research company ACNielsen.