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.