Global Air Tech: Resilient in the face of fuel pressure on airline capacity. Maintain Outperform on Amadeus and Market-Perform on Sabre

Air Tech vendors make profits principally on air traffic: passengers boarded and bookings. Higher fuel prices this year have ripped a hole in airlines' margins and forced slower capacity growth; the mid-term results have ever so slightly softened forward curves, but this is far from a return to 「normal」 prices that would ignite a growth revival, never mind catch-up volumes. Near-term schedules suggest airline growth remains subdued: 1% in Q4 and 2-3% in Q1, with risk in our view to the downside. Amadeus is enjoying offsetting benefits from unit revenue (upselling) and cost reduction, preserving earnings growth this year and next — more than can be said for the airlines it serves. The fuel crisis is not over: cheaper hedges put in place before the fighting kicked off are rapidly rolling off and difficult capacity decisions are imminent. We do not share the bullishness of incumbent GDSs on AI, yet we still see Air IT as basically immune, since airlines spend only ~1% of sales on IT and a