A Minneapolis-based unit of Accenture PLC that helped fuel the rise of low-cost airlines around the world has been sold for $830 million, one of the largest deals in Minnesota this year.
The Accenture business, called Navitaire, emerged out of technology systems created separately for Northwest Airlines and Morris Air more than two decades ago.
It was purchased last week by Amadeus IT Holding SA, the Spanish firm that is Europe's leading provider of airline reservation systems, in a deal that reflects the growing importance of discount carriers and Navitaire's role as the developer of the technical systems behind them.
"We were fortunate enough to connect with entrepreneurial-type folks who wanted to do an airline business but didn't have the legacy airline type of thinking," said David Evans, Navitaire's chief executive, said in an interview Tuesday. "We became very disruptive to the industry."
Navitaire provides reservations systems for AirTran, Frontier and Spirit airlines in the U.S. and dozens of other low-cost airlines elsewhere, including Dublin-based Ryanair, the world's sixth-largest airline and the global leader in number of people flown on international routes.
The company also provides other technology products and services, such as revenue accounting software, for several so-called legacy airlines, including Air Canada and Australia's Qantas.
After the sale, Navitaire, which employs about 60 people in Minneapolis and 550 worldwide, will become a separately run unit of Madrid-based Amadeus. Evans and other senior management will remain with the company and no changes are expected.
The company's roots trace to a software and ticket-imaging project codeveloped in 1990 by Northwest Airlines and Accenture, then known as Andersen Consulting. Andersen refashioned the product into one that could be sold to other airlines. Called PRA, it remains the industry's most widely used system for accounting for passenger revenue.
Navitaire's larger business in reservation systems grew from the 1999 acquisition of Open Skies, a system Evans developed after working as a technology executive at Morris Air, a Salt Lake City-based discount carrier bought by Southwest Airlines in 1993.
Open Skies was owned by Hewlett-Packard Co. for several years before Accenture, a period when Evans and other former Morris executives began to be sought out by investors interested in starting discount carriers.
As low-cost carriers proliferated, many adapted the Navitaire system as a less expensive alternative to those by Amadeus and its chief U.S. rival, Sabre, which were developed by major airlines' technology departments. Amadeus was started in the late 1970s by Air France, Iberia, Lufthansa and SAS airlines.
"The bigger guys were more encumbered by history and by technology standards that were set out in the 1960s and 1970s," Evans said. "We made a place where low-cost carriers could launch themselves."
Navitaire also helps low-cost airlines manage passenger loyalty programs and systems that connect passengers with hotels, rental cars and other travel services. In addition to Minneapolis and Salt Lake City, it has offices in London, Sydney and Manila.
For Amadeus, the purchase of Navitaire gives it a foothold in the fastest-growing part of the airline industry and a lower-cost offering to its main reservation system. In a statement, Amadeus Chief Executive Luis Maroto, said, "Bringing Navitaire's experience, industry know-how, client base and strong product portfolio is a significant step for Amadeus in the low-cost and hybrid-carrier segments."
Earlier this year, rival Sabre bought Abacus, a provider of booking systems for travel agencies that, like Navitaire, has a strong presence in Asia.
Accenture doesn't break out the specific financial performance of Navitaire. The business is part of an operating group that last year provided $7 billion of Accenture's $32 billion revenue and $1 billion of its $4.3 billion operating profit.
Accenture and Amadeus separately agreed that the consulting firm would be designated a "strategic partner" by Amadeus for management consulting, technology integration and other services to airlines.