Global Air Tech: Killer Instinct vs a-Muse-ing diversion. AI assistants and the future of airline distribution

Instinct is the hot new AI company in town, offering users a virtual assistant to help with daily tasks. According to the CEO, half of the company's volume is travel — but our experiment with a simple point to point booking failed, which strengthens our conviction in two hypotheses on the industry's evolution: first, customers will book and manage travel in AI channels; second, that change and mass adoption will happen at the deliberate, risk-managed pace of the legacy airline, not the speed of the AI startup. We remain of the view that airlines will engage with AI channels through their own APIs rather than creating dependencies on travel agents and GDSs. AI distribution is moving from a thought to its first real-world iterations, and may become a fourth distribution channel after direct, EDIFACT and NDC. We continue to see Amadeus (Outperform) as a highly attractive investment, with a double-digit EPS CAGR backed by a rising dividend yield in largely oligopolistic segments.