Better Travel, Better World

Like most companies that have been around for decades, Sabre Airline Solutions® has a colorful past. It started in 1953 on a flight from Los Angeles to New York. It was there, at 30,000 feet, that a chance meeting by two executives would lead to the first passenger reservations system and forever change the air transport industry.

On that flight, American Airlines President C.R. Smith became acquainted with R. Blair Smith, a senior sales representative for IBM. Their conversation about the travel industry generated an idea for a data processing system that could create and manage airline seat reservations and instantly make that data electronically available to any agent at any location.

Six years later, the idea became a reality when American Airlines and IBM announced their plans to develop SABRE. In the early 1960s, the airline industry experienced a dramatic technological leap forward with the introduction of the computerized system. This breakthrough brought automation to one of the industry’s key business areas.

Installed on two IBM 7090 computers, the state-of-the-art mainframe system processed 84,000 calls per day. The initial research, development and installation took 400 man-years at a cost of nearly US$40 million.

By 1964, the automated reservations system was implemented throughout American Airlines’ network, becoming the largest private, real-time data processing system and saving the airline 30 percent on its investments in staff alone.

More than a decade later, in 1976, the Sabre® system was installed for the first time in a travel agency, sparking a wave of travel automation. By the end of the year, 130 U.S. agencies were using the system. Two years later, it could store 1 million fares.

Canadian agents began using the Sabre system in 1983, and three years later, it was extended to the United Kingdom, paving the way for widespread international expansion. By 1988, the system could store 36 million fares, which could be combined to create more than 1 billion fare options.

Since then, and for more than five decades, the technology company has pioneered technological advances in critical areas across an airline’s entire business, such as commercial intelligence, flight planning and scheduling, merchandising, and pricing and revenue management.

It is committed to providing airlines with innovative technology that makes the industry, and therefore the world, a better place. However, to do that, Sabre Airline Solutions invests in more than technology. Its consulting practice is rich with industry experts who help airlines analyze their business, identify problem areas and recommend solutions that will help streamline and strengthen an airline’s overall operation.

Partnering with more than 300 airlines and 100 airports from all corners of the world, Sabre Airline Solutions operates the industry’s largest Software as a Solution business.

In the 10-year-anniversary issue of Ascend, Sabre Holdings® Chief Executive Officer Sam Gilliland addresses several topics, including the role airlines play in the future direction of technology and why the air transport industry is critical to the world’s economic recovery.

Question: Since inventing the first passenger reservations system, Sabre Airline Solutions has come a long way during the last 50 years. What is the key to its long-term success?

Answer: I believe the key to long-term success for Sabre Airline Solutions has been its focus on customers. Listening is important. Certainly, learning is also important. We constantly learn through our engagements with airlines on a global basis. In short, it’s about listening, learning, leaning into the cutting edge of technology and formulating solutions that help our customers solve their business problems.

Q: In an environment that rapidly changes and with constant pressures to stay ahead of the curve in terms of new technology, how do you keep the momentum going year after year?

A: I think this really comes back to our people. Staying ahead means having the type of talent that is looking ahead and thinking about the long term… not just present day. That’s, again, listening to our customers… not only listening to the needs that they’re setting forth today, but also getting that understanding of where they’re going tomorrow and developing a roadmap that our customers can commit to, agree with and invest in alongside us.

Q: What role do airlines play in the direction of your technology?

A: Our customers have always played a major role in guiding our direction. We have multiple online and off-line channels that ensure our customers have a voice to provide suggestions and feedback on our products and services. This collaboration occurs at all levels, regardless of airline size or geography. In addition to customer feedback, we consider future trends and industry challenges. Collectively, this helps ensure we provide innovative solutions that meet real needs for our customers and the industry as a whole.

Q: The airline industry has experienced the toughest decade, with a number of catastrophic events. How has Sabre Airline Solutions helped airlines overcome such trying times?

A: I think this is perhaps the best example of the value we deliver to airlines, in that much of the technology we’ve developed over the years focuses on optimizing airline operations, even in the midst of significant disruptions. For example, a major European-based airline was impacted significantly by volcanic ash a couple of years ago. Its schedule was, in essence, broken. It had aircraft that were out of position. It needed to figure out very quickly how to get back on schedule, and our tools allowed the carrier, within a couple of hours, to begin the repositioning process that might have otherwise taken a week to figure out.

We offer a number of solutions that help our customers overcome challenging situations and get their operation back in order as quickly as possible. Irregular operations happen on a daily basis, but it’s the big events that can devastate an airline and leave a longer-lasting negative impact. We make it a priority and believe it’s our responsibility to equip our customers with the tools they need to recover quickly from the most catastrophic events.

Q: What are some of the biggest accomplishments Sabre Airline Solutions has made on behalf of its airline customers during the last 10 years?

A: My proudest moments are when I hear from our airline customers that we’ve done something significant to add material value to their business. During the last 10 years, we’ve enabled them to capture new revenue streams, take advantage of new technologies and control their costs, despite an array of damaging events.

We’ve brought a lot of new products to the market during the last 10 years. What comes to mind is the launch of the original SabreSonic® Web eight years ago, which helped our airline customers grow their emerging airline.com channel.

Business intelligence is also a critical area for today’s airline, and we have launched a new solution that provides airlines with one commercial version of the truth by combining critical internal and market-performance data into one user-friendly system.

Q: “Better travel, better world” is your corporate commitment. What does this mean for airlines and their customers? How does innovative travel technology make the world a better place?

A: At our core, we are a travel technology company serving the world’s largest industry — travel and tourism. We provide technology that can make travel more efficient and make it more accessible to more people. And our corporate commitment is even larger than that. The virtue of travel is that it allows people, nations and cultures to connect, which in turn leads to a better understanding of one another, and that’s really what we mean by “better travel, better world.” Certainly, our airline customers play an important role in transporting people all over the world, and we assist them by providing technology that helps them run their airlines, market their services and serve their customers.

We also feel it’s important to give back to the communities in which we live and do business, and we often invite our customers and partners to join us in our volunteering and giving efforts. We find not only are these opportunities to nurture society, they are also opportunities to strengthen our relationships in completely different ways. We also work alongside our airline customers to advocate for the overall health of the travel industry, and for airlines in particular. Airlines are the power grid of the travel industry, and we need them to be efficient and profitable for travel to succeed.

Q: Sabre Airline Solutions states that it gives airlines the “freedom to better market their product, sell to their customers, serve their customers and operate their airline the way they want.” What does this mean? Why is it important to airlines?

A: It means we provide more choices and ways for an airline to expand, grow revenue, be efficient or productive, and deliver their unique customer experience. When you partner with us, you’re not locked into a certain platform or way of doing business. Instead, you have flexible technology and more choices from the industry’s largest SaaS provider. Our systems work well together or with an airline’s systems or that of a third party.

This type of freedom is important because during these highly competitive days, airlines need flexibility for their business. No matter what type of airline business model it is, whether it’s a low-cost carrier, a hybrid or a network carrier, we have the solutions airlines need that adapt and grow as the airline grows. And that’s what we mean by ‘freedom.’

Q: In 2010, you were appointed to the U.S. president’s management advisory board to advise the president and the president’s management council on best business practices. How will your involvement with the U.S. government improve the travel industry, specifically the airline industry?

A: Participating in the president’s management advisory board will have more of an indirect affect on the airline industry and consumers more broadly. We take private industry practices and apply them to the government sector, making it more efficient.

In addition, I participate as the vice chair of the travel and tourism advisory board, which reports into the secretary of commerce, Secretary Bryson. In that role, we focus on a handful of issues that are extremely important to the travel industry. That includes things like infrastructure as well as aviation security and how we improve that process, how we streamline that process so it is a better experience for passengers who are making their way into and out of airports. We look at issues like taxation on the travel industry and work together to find ways to minimize it. We focus a lot on the industry… on the issues that are important to the entire travel industry but also very important to airlines.

Sam Gilliland: Advocate For The Travel Industry

Q: During a speech you gave earlier this year in Washington, D.C., you talked about the positive impact of travel on our economy and society. Why is the air transport industry vital to the world’s economic recovery?

A: As I said, the airline industry is the power grid of the travel industry. Certainly, people travel by train, bus and car, but airlines have really opened up the world to the traveling public. As such, they are delivering approximately 6.5 million passengers a day around the world.

Those passengers are spending money on hotels, rental cars and the like. Once they arrive, they spend money on any number of things at their destination. For every dollar spent on travel, US$2.34 is spent on other things when the traveler gets to his destination. It’s a huge economic injection into local economies when a passenger lands in a given destination. Additionally, a new job is created for every 20 to 30 visitors into a given destination.

That’s why it’s so important that our airline industry is healthy and why airlines are so important to the world’s economic recovery.

Q: The European Commission, early this year, imposed the European Union Emissions Trading Scheme despite worldwide opposition. What are your thoughts on the EU ETS? How can your involvement with the government help address emissions concerns for airlines around the world?

A: We believe that any responsible government regulation of aviation emissions demands should include harmonized international standards. It should not be subject to a patchwork of regional or local schemes, which would create major compliance problems and cost burdens for airlines operating throughout the world. Any emissions trading policy should be negotiated and implemented at the global level through the International Civil Aviation Organization. We support the strong, principled position the U.S. Administration and Congress have taken opposing the EU ETS, as well as similar positions taken by other countries. There is significant pressure building on the European Union to reverse course from a misguided, unilateral approach.

While getting greenhouse gas emissions policy right on a global basis should continue to be a priority, and all participants should be responsible for doing their part in reducing their carbon footprint, airlines have already demonstrated a major commitment to this endeavor and should get credit for it.

Q: Sabre Airline Solutions is involved in the U.S. FAA’s NextGen and European Commission’s SESAR air traffic control initiatives. Why is your company’s involvement crucial to the outcome and success of these programs?

A: SESAR and NextGen will affect all major transportation players including ourselves. There will be fundamental changes to the way flight operations will work in the future:

  • Airlines flying to, from or over European and U.S. airspace will need to upgrade many of their operational systems and communications equipment.
  • They will need to adopt new business processes as new standards and procedures are introduced.
  • Aircraft manufacturers and equipment suppliers will need to upgrade and enhance onboard aircraft equipment and technology.
  • Airport operators will need to invest in new infrastructure and technology.

Based in Southlake, Texas, Sabre Holdings, parent company of Sabre Airline Solutions, has approximately 10,000 employees in 60 countries around the world. 50 percent of the workforce is based outside of the United States, giving the company’s customers easy access to industry experts in their own region of the world.

As a provider of software and consulting solutions for airlines, we need to invest in our technology to ensure it meets the new specifications and operating requirements. Moreover, we must help our customers take maximum advantage of the performance and cost improvements the programs will present.

In terms of SESAR, we, as part of the Fly4D consortium led by Airbus, will help develop and establish requirements and specifications across the fields of schedule design and management, flight operations control, flight planning, airport hub/turnaround management, flight operations situational awareness and operational performance analysis and intelligence.

In terms of technology, we will lead the operational prototyping, verification and validation of future airline operations control functions. We will also build and host an integrated test platform whereby consortium partners will interface their solutions and prototypes to simulate the operations of airspace users and how they will interact with the rest of the SESAR world.

Q: Sabre Airline Solutions is based in the United States, but it supports the global airline industry. What strategy have you put in place to ensure airlines and related businesses outside of the United States get the same level of service and attention as your locally based customers?

A: Approximately 50 percent of our employees are based outside the United States. Getting our employees closer to our customers has been an extremely important element of our service offering during the last five to 10 years. Today, we have offices all around the world. In the event there is a customer issue that cannot be resolved over the telephone, our global professionals can be onsite within a very short period.

Q: With cultural and business differences across all regions of the world, how do you ensure your business strategy applies to a diverse customer base?

A: Our business strategy reflects how we leverage our unique capabilities to collaborate with airline customers on their most challenging business issues. Many of these challenges are common across our customer base, including mitigating fluctuating fuel costs, improving the traveler experience and minimizing the impact of irregular operations, to name a few. However, with approximately 10,000 employees in 60 countries around the globe, our business reflects a deep understanding of the unique differences among our airline customers as well as the shared goal of working with the right business partner for their success.

Q: What is the main message about your company you’d want airlines to know?

A: We are a true partner that can assist in multiple facets of their business, no matter what size, complexity, region or business model. Our flexible technology and solutions give them freedom to run their business the way it works best for them … and their customers.

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