The only computer reservation system still linked to a single airline is about to gain more autonomy as AMR plans to convert its Sabre operating divisions into a separate shareholding subsidiary. But will the parent of American Airlines seek an equity partner for Sabre?
AMR has toyed with a Sabre spinoff or partnership ever since the US Department of Justice blocked a partial sale to Delta Air Lines in 1986. Following an abortive merger attempt with Amadeus, the Sabre units have continued to grow and diverge from American Airlines as they became the mainstay of the group: last year they produced 44 per cent of AMR's profit on only 9 per cent of its sales.
Ever since Michael Durham took over the position last year as Sabre's chief executive he has lobbied for more autonomy. At least four reasons are now pushing AMR towards granting his wish: Sabre needs more capital to remain competitive; it would break airline and travel agent resistance to dealing with a company so closely linked to only one airline; AMR wants to focus more on core airline operations; and last year's European directive requires any CRS operating in the EU to maintain a separate legal status from its affiliate airline.
AMR has not announced whether it will sell shares after it spins off Sabre. Analysts place Sabre's value at about $4 billion. Sabre may have to pick up $1.5 billion in debt and leases now carried for it by American Airlines, but Durham argues that cutting ties to the airline will enhance Sabre's prospects. One worry American now faces is what to do with company data stored in Sabre's files.
David Knibb
Source: Airline Business
