Amadeus: Travelling at the speed of technology
In the 22 years that Tomás López Fernebrand has been with Amadeus he has seen a revolution not only in his company’s own business but the travel sector as a whole
“The internet has completely changed the way much of the travel sector operates and significantly altered the way we do business – we are now a global leader in e-ticketing. We are now a major player in e-commerce solutions for the airline industry and active in areas that simply did not exist when Amadeus was first established,” he says.
As General Counsel and Secretary to the Board, López Fernebrand leads an international team of over 40 in-house lawyers at the Madrid-based company.
Since his appointment as the Group’s Chief Legal Officer he has helped guide Amadeus through an IPO in 1999 and a leveraged buy-out by a consortium comprising the private equity houses BC Partners and Cinven, alongside Air France, Deutsche Lufthansa and Iberia – a further flotation of the group is now anticipated.
Originally created as a Global Distribution System by Air France, Lufthansa, Iberia, and SAS in 1987, Amadeus has since emerged as a pioneer in the travel industry, becoming the first global distributor to offer neutral (unbiased) flight availability data. It has subsequently expanded into car, hotel and bespoke corporate and travel bookings and since 2000, in the area of Passenger Service Systems (PSS).
Amadeus last year recorded revenues of €2.4billion and now provides ticketing and booking facilities to over 104,000 travel agents and more than 36,600 airline sales offices. The company’s systems carry an estimated 580 million messages each day.
Despite the complexity of Amadeus’ operations the legal team nonetheless tries to mirror the business structure as much as possible, says López Fernebrand. It is split along both divisional, regional and functional lines, with the core focus on corporate and tax, regulatory, IP and IT, contractual and legal issues.
“Lawyers are spread across the Group’s operations but regarded as a central function. All report either to Senior Attorney or ultimately to me in Madrid but there is also a very close link to their business divisions. We are essentially a services, data processing and software development business and at the end of the day technological processes are at the core of Amadeus’ value – the protection of our IP rights is therefore hugely important but we also face significant day-to-day issues relating obviously to the data and transaction services we provide.”
But while the parent Group may be Spanish, the business now has operations in virtually every country in the world, and claims nearly all the major international airlines as clients. In addition, it operates a major data processing facility in Erding, close to Munich in Germany, and a Research and Development facility in Nice, France – subsidiaries that López Fernebrand helped establish. In addition Amadeus operates regional headquarters in Miami, Bangkok and Buenos Aires.
The in-house legal team therefore has broad international capabilities and tries to handle most issues internally, but inevitably the spread of the company’s operations and the very specific technical needs it has means that outside counsel are used often, he says.
“The nature of our business means that we have to comply with all EU data rules as well as the specificities of countries’ own national rules. For transactional work we have tended to use international firms, but we have however found that there are relatively few firms able to combine our specific IP, and complex IT and outsourcing needs.”
The legal team has to date therefore relied on a core group of external law firms with which it has worked for a number of years but Amadeus does not have a formal panel, he insists. “There are around five or six specialist firms we regularly use, which are able to offer the kind of technical support we need, while in the transactional sphere the number is obviously bigger. It helps that the firms we use already know us and understand our business, but ultimately we must trust the work they do.”
What has been fundamental therefore has been to build dedicated and comprehensive expertise in-house, he says. Development projects are often long in duration and it is important to maintain a consistent and close overview of the technical, business and relevant legal issues.
“Across the travel industry an Anglo- Saxon style has been adopted in the way that agreements are negotiated and drafted and which are often subject to UK or US law. When it comes to counselling the needs of the business this is a fact of life, like the industry itself, us lawyers have also had to adapt to the changing times.”