Can Sabre Become a Fast-Moving, Innovative Technology Company?

The air was thick with irony.

At Sabre’s big Airline Technology Exchange conference in Las Vegas last week, all of Sabre’s airline users had gathered to talk about product enhancements and exchange learnings with each other. Most of the sessions were small break-out groups that focused on the various products ranging from crew scheduling to revenue management. But on the first day in the general session, Sabre brought in a keynote speaker named Tony Fadell, an inventor of the iPod and iPhone, to deliver the message that the airlines need to innovate and disrupt themselves. If they don’t, he warned, others will. I won’t even get into the oddities of the ill-prepared talk. What’s more interesting is that Sabre has spent years doing exactly the opposite: blocking innovation and fighting disruption, most notably in the world of airline distribution. To tell the airlines to do as Sabre says and not as it does was… bold, to say the least.

[Disclosure: Sabre paid for my travel]

It’s easy to see this as an ill-advised and tone-deaf move by Sabre, but there is another way to look at it. This could, we can hope, be a signal that change is finally coming to the company. Just a few months into his tenure as CEO, airline veteran Sean Menke, is trying to make Sabre work and think differently. When he walked on-stage for his welcome speech earlier that morning, Sean was played on by the David Bowie song Changes. He struck a cautious tone saying that change was needed, but it wasn’t necessarily enormous change. I asked him about that and more in an interview shortly afterwards.

We’ve heard Sabre pay lip service to this idea of innovation before, so why should this be different now? Well for one thing, Sean is an airline guy. A decade ago, he was the EVP and Chief Commercial Officer at Air Canada. At the time, that airline was pressing very hard to go around the entrenched distribution players like Sabre. Not only did Air Canada launch branded fares which couldn’t be sold through Sabre’s system, but the airline partnered with ITA Software to build a new airline reservation system from scratch (the partnership fizzled). He went on to run Frontier (before it was bought by Republic) and Pinnacle. After a stint as EVP and COO at Hawaiian, Sean went over to Sabre, but it’s that early experience at Air Canada that seems to have formed how he thinks about Sabre and distribution in general.

One thing he took away from Air Canada was that, surprise, nothing is easy. “I learned over time just how difficult all these things were with all the best intentions of trying to make change…,” he told me. As Sean watched low cost carriers grow and different (eg a la carte) models flourish, he “always kept coming back to technology [as] the great enabler to allow these businesses to really go to the next level, and airlines are just not technology companies.”

That’s where Sabre comes in, or where he wants it to come in. While Sean spent his early days trying to get around the big guys like Sabre, he says he’s come to believe over time that all distribution channels are necessary. With that mindset, he wants Sabre to be “the enabler.” That’s a good vision, but it’s not one that’s going to be easily implemented at an old-school company like Sabre which hasn’t played that role in recent memory. How entrenched is Sabre in its ways? Sean doesn’t think people even view Sabre as a technology company. He says the company is seen as “a provider of services for the airline business,” and he believes that needs to change.

So how does he get this massive ship to start turning? A good place to start would be improving speed-to-market. Airlines have complained for years (sometimes in court documents) that Sabre is incredibly slow at adapting to new business models. One memorable example was that it took, I believe, one to two years to get Sabre to be able to sell paid seats on US Airways. That’s one tiny thing that took ages, and it’s not sustainable to be that slow. According to Sean, he’s “very focused” on that issue, and Sabre needs to have technology that is “nimble enough, agile enough” to allow it to be quicker.

In Sean’s eyes, part of the issue may be that Sabre’s focus is too broad. “We have a very broad portfolio, specifically in [Sabre] Airline Solutions we spent a billion dollars a year on technology. Are we spending the dollars on the things that are going to give us the biggest bang for the buck? I’m not opposed to partnering, but if we put products out there, I want to make sure we have the best products out there. If that means we have to trim other parts of our portfolio down to make sure we’re investing properly…,” he trailed off. As of now, there are no specifics on what exactly that might mean.

Is this going to be the beginning of Sabre actually changing into a forward-thinking technology company? There’s really no way to know until it happens. But they say the first step is admitting you have a problem, right? Oh wait, that’s Alcoholics Anonymous. Eh, close enough. Now we just wait and see whether Sabre becomes a fast-moving, innovative technology company or if it ends up in the graveyard of companies that found themselves disrupted when they failed to adapt. No pressure, Sean.

[Original U.S. Navy photo by Mass Communication Specialist 2nd Class Amanda R. Gray]

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10 Comments on "Can Sabre Become a Fast-Moving, Innovative Technology Company?"

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Don Wolford
Member

Sabre has their work cut out for them. At no time in the last 30 years has their been more opportunity for new entrants in airline operations management. FAA is making SWIM (Systemwide Information Management) data available to anyone who wants to build an app, threatening enterprise automation like Sabre Flight Explorer. New entrants in flight planning automation are moving towards cockpit connectivity and 4D trajectory based operations. The days of buying and exploiting existing companies and services are ending.

troyfilson
Member
Hi Cranky, your ol’ buddy Troy here. I would disagree that paid seats is a tiny thing. The implementation of paid seats is immensely complicated and varied. Some airlines want every seat to be a paid seat, some want exit rows and bulkheads, some want windows and aisles. Then, there’s the issue of waiving those paid seats for tier level elite frequent flyers or even elite members of partner airlines. The ways in which complexity can be added to the innocuous sounding “paid seats” is enormous. So, yes. Sean is trying to turn things around at 1S, but trivializing something… Read more »
Stewart
Member

Complex? Sure. So, do it in a month rather than in a week. But, 1-2 years is a bad joke.

troyfilson
Member
To be fair, we are not dealing with an exact figure here. CF, you said 1-2 years, you believe. I don’t know the time it took either, but there are too many factors to blame the system vendor alone. It’s your perception that Sabre is to blame, but knowing how implementations work and especially those with new features, 1-2 years may be usual. I know I’m changing course here a bit, but one obvious example is the rollout of ancillary services in the industry. We’ve been doing that for the past 7 or 8 years now and it still doesn’t… Read more »
Jon Snow
Guest

“I won’t even get into the oddities of the ill-prepared talk. What’s more interesting is that Sabre has spent years doing exactly the opposite: blocking innovation and fighting disruption, most notably in the world of airline distribution. To tell the airlines to do as Sabre says and not as it does was… bold, to say the least.”

Mmmmmm yeah, that’s the good stuff! Lay it on thick!

Tomasz Ronda
Guest

It would be great to at least once read what Sabre has already done and not what they intend to do. There are so much opportunities and possibilities in Airline Solutions alone…

Chase
Guest

I think the simple lack of comments on this article speaks to just how complex the GDS and distribution landscape really is. The ‘big 3’ are giant dinosaurs that lack the nimblness to really excel and innovate. I would argue that Amadeus is the only one that has set itself well for the future by diversifying its revenue streams, and modernizing its GDS system architecture to get away from TPF Mainframe and move onto open back-ends.

Fly
Guest

Wow, a bloated ancient company with a legacy business model that can’t keep up with changing times. Sounds like a familiar story!

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