AMERICAN AIRLINES parent AMR is considering a spin-off of its highly profitable Sabre computer reservation system (CRS), raising speculation that cash from any deal could put the carrier back on the acquisition trail in the US airline market.
AMR chairman Robert Crandall, who once joked that the group would earn more by selling the airline and keeping the CRS, says that Sabre will be set up as a separate company within the group.
He adds that Sabre's independence will allow it to form new "partnerships and alliances". Sabre, which has 300,000 connections around the world and turned in sales of $1.6 billion in 1995, is the only major CRS in the hands of a single airline group. Rival systems Amadeus and Galileo are held by international airline consortia.
It is not yet clear whether the move will lead to a partial sale of the business or even a public flotation, which could net AMR a war-chest of cash.
American will also benefit from the separation of Sabre as the newly independent company would take with it some $850 million of airline debt.
The prospect rekindles expectations that American may use any bonus to look again at acquisitions within the US industry. American in 1995 followed United Airlines' lead in opening merger talks with USAir, but the negotiations ended without a bid.
USAir's new chairman Stephen Wolf, talking to workers about the need for productivity and wage concessions, further raised speculation with comments, that the airline would have to consider an acquisition, merger or strategic alliance to secure future growth.
The moves come as the US airline industry began a roll of record first-quarter results. AMR more than quadrupled net profits to $157 million, while Northwest Airlines continued its run of record results with profits of more than $53 million.
Source: Flight International
