UPDATE 3-Travel booking group Amadeus cancels dividend and cuts costs after 2020 disaster
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February 26 (Reuters) – Amadeus canceled its dividend for 2020 and is due to cut costs by more than half a billion euros this year after the COVID-19 pandemic ravaged the activities of the Spanish booking firm of trips.
But the world’s largest reservation service provider is confident that things will improve in the second half of 2021, as vaccine deployment programs are expected to start to pay off.
âFor the first quarter of 2021, assuming volumes remain at current levels, we should see overall results roughly in line with the last quarter,â Managing Director Luis Maroto told analysts.
Amadeus posted a larger-than-expected loss of 88.2 million euros in the fourth quarter, compared to a profit of 276.1 million a year earlier.
Madrid-based company to cut costs by â¬ 550million ($ 666.82million) in 2021 after fourth-quarter revenue drop 65% as spike in COVID-19 infections hit air travel during the last three months of the year.
Amadeus, whose distribution system accounts for more than 40% of global travel agent bookings, makes most of its profits on a pay-as-you-go basis and relies on the aviation industry.
The company said plane bookings by travel agents fell 82% in 2020, while the number of passengers boarded through its IT solutions business fell 65%.
In 2020, passenger air traffic contracted by two-thirds, the largest drop in history and eight times faster than in the 12 months following the September 11 attacks, the Association said. international air transport (IATA).
IATA expects only a limited recovery in traffic this year, between 33% and 38% of the 2019 level, depending on whether or not governments maintain travel restrictions during the peak summer season as new viral strains emerge. ($ 1 = 0.8248 euros) (Reporting by Anita Kobylinska in Gdansk; Editing by Inti Landauro, David Clarke and Jane Merriman)