From Service Provider To Partner
The last decade has been riddled with turbulent times for the airline industry. However, with each wave of turbulence have come opportunities to learn, grow and improve. Sabre Airline Solutions® leveraged these opportunities to help airlines overcome the events that forever changed the industry's landscape. As a result, the technology company is prepared to travel into the future with its airline customers at the forefront.
Imagine having to deal with numerous tragic events, life-threatening illness, global warfare and geopolitical issues before you are even 10 years old. That is exactly what happened to Sabre Airline Solutions® in its infancy as a company, after being spun off by American Airlines' parent company AMR Corp., beginning with the tragic events of Sept. 11, 2001.
To gain appreciation for how the company endured these challenges and helped the airline industry recover, one must review how Sabre Airline Solutions was created.
How Sabre Got Its Wings
A series of events began to occur in the early 1980s that would forever change the fundamentals of the airline business. The airline industry was evolving very rapidly through deregulation, technology and, in some sense, the algorithms used to solve the problems.
Since the U.S. airline industry was in the early stages of deregulation, AMR was making some big strategic decisions. The impact of the solutions that were being developed was significant for both American Airlines and the airline industry as a whole.
Former American Airlines Chief Executive Officer Bob Crandall had a real appreciation for technology, operations research and decision-support systems as well as the potential those solutions had. He was a true visionary in terms of how operations research, industrial engineering and computer science could be used to develop innovative and high-value solutions for the airline industry.
This is when Sabre Airline Solutions (then Sabre®) began to really spread its wings. American Airlines started building decision-support systems for other airlines, Amtrak and even the French national railroad. It soon formed a wholly-owned subsidiary called American Airlines Decision Technologies (AADT). In parallel, AMR started a division called AMR Information Services (AMRIS) to sell reservations systems to airlines. The company started adding other airlines into what American Airlines called the multi-host reservations system.
Client/server technology was a huge enabler to success since everything didn't have to run through mainframes; it could be put on people's desktops. It also enabled people to do coding and development as well as deliver solutions directly to airline customers and users. UNIX workstations, personal computers and distributed computing were natural fits for some of the decision-support systems.
In early 1994, both AADT and AMRIS moved under the Sabre umbrella as Sabre Decision Technologies. In 1996, a decision was made to partially spin-off Sabre and make it a public company. Sabre was still largely owned by AMR even though it traded on the New York Stock Exchange. Sabre management wanted a growth story, so it began to pursue opportunities for airlines and travel companies to outsource their entire information technology operations.
In 2000, Sabre was completely spun off, and after a year and some initial success, the outsourcing business was sold to Electronic Data Systems (now Hewlett-Packard) in 2001. Sabre kept the airline reservations and software business and created Sabre Airline Solutions, which was officially formed on July 1, 2001.
Mourning In America
Just two months later, on Tuesday, Sept. 11, 2001, people all across America were busy with their morning routines, unaware of the tragedies the day would bring. Before 9 a.m. Central Standard Time, televisions and radios unfolded what many now know but didn't understand at the time: The world had officially changed. The United States of America was the target of a planned terrorist attack that involved hijacking four passenger planes. Nearly 3,000 people died in the attacks.
Conversations among the Sabre Airline Solutions leadership team entered into deep strategic and tactical discussions.
“The ramifications started to sink in, and we wondered what it would mean for the entire industry,” said Steve Clampett, who recently retired from Sabre Airline Solutions as president of airline products and solutions. “We got a feeling that the world changed that day — no one really had an appreciation for what that meant, yet. It was a huge global impact, and travel and transportation — airlines in particular — were now right in the middle of it.”
Remembrance To Resilience
Because Sabre Airline Solutions is such a prominent part of the airline infrastructure, its customers had more questions than its employees could answer. At times, communication was stunted, given the circumstances. With airplanes grounded for as long as they were, many issues were cropping up in the market and in the airline industry. Airlines needed help putting their schedules back together and were trying to figure out how to recoup what they lost. They needed help, and experts at Sabre Airline Solutions were ready to assist.
“Our people take a lot of pride in what they do, so there was a natural feeling of 'let's roll up our sleeves and get to work here,'” Clampett said. “There was a lot of pride in the business to ensure we could do all we could until the dust settled and pieces came back in place.”
Yet, turbulent times kept buffeting the industry. New storms were brewing as the industry weathered the economic impact of 9/11. The War on Terror had begun, and in 2003, the highly contagious avian flu (known as SARS) shut down flying in Asia. “All these events happened in a fairly compressed timeframe of Sabre Airline Solutions being formed as a separate company from American Airlines,” Clampett said. “The product side of our business melted down in 2004, and we missed our targets pretty badly. At that point, we had to regroup as a leadership team and ensure we were on a sustainable path forward.”
Those events shaped what the company did and how it approached things on a go-forward basis. Two of the many actions the leadership team took were to expand its global offices and invest in airline solutions and capabilities to address customer and industry challenges.
Surviving Industry Pressures
The business started to reap some of the benefits of its investment in the 2005-2006 timeframe.
Leadership also spent a lot more time giving employees clarity about the company's vision and strategy.
“When you go through a period of shocks like we did, you get much clearer on what's important and you focus on that; culture was one and building out our global centers was another,” Clampett said. “As the world changed, we needed to be in a position to serve our customers and stay committed to building out our hosted infrastructure.”
During the past 10 years, Sabre Airline Solutions has invested in several areas not only to help airlines recover from the industry's most trying decade but to also support them well into the future. A few of several more substantial investments by the technology company have been made in the areas of irregular operations recovery, passenger reaccommodation, merchandising and e-commerce.
Carriers worldwide began making dramatic business-model changes to survive not only fuel costs but myriad challenges created from different pressures in the industry. Some of the initial challenges coming out of that period (2001 – 2006) were:
- Controlling skyrocketing fuel costs and gaining fuel efficiencies,
- Increasing revenue and reducing costs,
- Gaining operational efficiencies,
- Finding better methods for managing crew,
- Optimizing scheduling practices.
“During the time following 9/11, we began to focus on how to help airlines identify more efficient procedures to operate,” said Dave Roberts, director of airline and flight operations for Sabre Airline Solutions. “Coming out of 9/11, there was a need to be much more efficient and security-minded. The development of a more structured operations control center assisted in both of these areas.”
Sabre Airline Solutions not only developed integrated system operations control (SOC) solutions, but its consulting practice looked more directly at the major components that the SOC should address from normal to irregular operations. Some examples included on-time performance, maintenance planning and control, block optimization, and benchmarking airline operations performance. Operational efficiency also helps with labor and fuel expense, an ongoing concern for airlines.
“There came a change in philosophy that we were no longer a software provider; we were offering a lot more than software,” Roberts said. “We were providing a complete service surrounded by all the components that go into software. We took a great deal of pride in what we were doing to ensure our customers knew that after we sold them a solution and implemented it, we were going to be with them for the long haul. We went from service provider to partner.”
Investing In The Airline Industry
While many of the challenges facing the airline industry remain constant, Sabre Airline Solutions continually examines emerging industry priorities and the evolving problems its customers are looking to solve. The ongoing investments in its capabilities reflect how it helps airlines make money, save money and provide a better experience for their customers. The objective was — and continues to be — to help airlines meet and exceed passenger expectations through services they observed and those they did not.
Primary areas of investment during this time can be grouped into three ways that best support airlines, including:
- Revenue integrity — The introduction of Sabre® AirVision™ Revenue Integrity brought a real-time revenue integrity solution to the market. Through real-time analysis of reservations as they come in, issues such as duplicate or fictitious bookings can be identified earlier and, thereby, released sooner so they are available and can be rebooked while demand still exists.
- Web technology (e-commerce) — The growth of the e-commerce channel has revolutionized how airlines interact with their customers, and it will continue to shape the industry. Sabre Airline Solutions has been at the forefront of the e-commerce movement, enabling airlines' direct distribution strategies through an integrated SaaS-based Internet booking engine. This scalable SaaS environment reduces overall hardware operating costs and time to market while still providing a stable and flexible solution that allows airlines to deliver a shopping and booking experience that is aligned with their unique brand. Airlines can further drive online sales conversions and revenue per order by applying customer-centric business rules to shopping and merchandising, positively impacting profitability and customer loyalty.
- Merchandising/ancillaries — Airline merchandising is more than just offering additional products and services for sale, it is a strategic business model shift in which airlines are becoming more and more like retailers. The capabilities available today and being brought to market by Sabre Airline Solutions will enable airlines to evolve their merchandising approach. New decision-support capabilities allow airlines to take a more sophisticated data-driven approach to pricing and revenue managing à la carte ancillaries as well as branded fares. Reservations and Web capabilities help carriers deliver the right offerings to the right customers and at the right time to enhance the customer experience and drive incremental revenue for airlines.
- Alliance integration — Airlines are now looking beyond basic PNR and frequent flyer synchronization to achieve greater financial benefits. Sabre Airline Solutions offers myriad capabilities that make new alliance implementations easier to integrate. Airline partners will have access to newly emerging models where crew, equipment and other assets (such as slots, hubs, lounges and check-in counters) are shared across the alliance network.
- Advanced platform for data and application integration — An airline services exchange platform is a revolutionary new way to bring together, share and act on data. It allows airlines to make faster, more informed strategic decisions by accessing and acting on real-time data.
- Flight plan management — Sabre® AirCentre™ Flight Plan Manager uses an advanced four-dimensional cost optimization technique for flight planning that is unique to the market. Route, altitude, speed and time are all simultaneously considered in creating an optimal flight path that accounts for fuel costs, CO2 emissions and delays.
- Aircraft tracking, managing and communications — Sabre® AirCentre™ Flight supports end-to-end flight operations needs. Key areas of innovation include Sabre® AirCentre™ Flight Explorer, an aircraft situational display solution that provides airlines with a graphically rich display of integrated flight information, weather and other operational data, thereby allowing for enhanced operational decision making. Sabre® AirCentre™ eFlight Manager is another key innovation brought to market. It is a comprehensive electronic flight bag solution that brings new technology to the flight deck for digitally managing key flight plans and manuals.
- Increased employee productivity — Crew-related expenses are typically one of the top two costs for an airline. Sabre Airline Solutions has made investments across the portfolio to help airlines manage crew-related costs by bringing to market solutions that help increase employee productivity. Agent productivity is enabled through the SabreSonic® Customer Sales & Service Interact Interface, which helps airlines provide a consistent user experience across all agent touchpoints. The Sabre® Qik® Solution helps further enhance Interact Interface by creating roles-based workflows that increase agent productivity while reducing training and telecommunications costs.
Provide A Better Customer Experience
- Enhance customer sales and service capabilities
- Improve on-time performance
- More efficient handling of irregular operations and passenger reaccommodation — As disruptions occur, Sabre® Reaccommodation Manager and Sabre® AirVision™ Recovery Manager enables collaborative and real-time decision making with advanced optimization techniques and the seamless exchange of information among movement control, crew management, airport operations and passenger-handling systems. Airlines are able to resolve problems quickly and efficiently, providing passengers with optimal alternative itineraries and automatically notifying passengers of the change in itinerary.
- Travelbank — To compliment the capabilities of existing reaccommodation solutions, Sabre Airline Solutions created Travel Bank, a personalized e-bank that stores monetary credits from ticket exchanges and cancellations as well as credits provided by the airline for service disruptions. Travel Bank is integrated with customer profiles and is hosted online where customers can access their account to view credit balances as well as transaction history. This enables airlines to quickly and easily compensate passengers for travel disruptions and improve customer experience.
From Service Provider To Partner
Sabre Airline Solutions is much more than just a service provider to its airline customers. Not only does it offer a complete service surrounded by all the components that go into software; it's mission is to see that customers get the most long-term benefits from their services and solutions they use to operate at top efficiency.
Because the airline industry is technology-dependent, it will be at the forefront of mobility or mobile-type applications. Given the nature of the business, the airline industry will likely leverage more out of technology faster than other industries. There are a number of possibilities for using mobile technologies with airlines. A few of the many future trends to consider include:
- Capacity: Today, it is difficult to quickly move capacity around with all the logistics to consider, such as pilots, gates, airports, flight plans, meals, etc. If the industry could do this, airlines would be more efficient because they could move their capacity around on a more dynamic basis to better accommodate demand.
- Social media: Social media will continue to have a big impact in how airlines talk to customers. It is evident that passengers are quick to post something on a social network when they have had a bad experience on an airplane or with their travel. Airlines are responding to and resolving many customer issues through these same social networks. They are also using these channels as part of their loyalty programs.
- Data: The systems airlines use alone or share with alliances are not as integrated as they could be, so airlines are unable to fully utilize the data they have. One of the big things to watch will be how airlines evolve their customer experience by better accessing and using all of their available data.
- Air Traffic Control: NextGen, Seamless Asian Sky and SESAR represent the world's largest infrastructure projects to help transform the world's air traffic control system. While there are many pieces to these projects, the cornerstone is the transition from land-based navigation aids to satellite navigation. To fully realize the capabilities of these initiatives, aircraft will need more equipment that will continually broadcast their position. There will also be a requirement for the aircraft to receive the position information of all other aircraft in the vicinity to maintain a situational view of all air traffic.
“We've been flying for more than 100 years now, and the physics of aerodynamics have obviously not changed,” Roberts said. “Yet, the way we handle flying has changed significantly. When we talk about Freedom to Fly, it's the freedom to use your capabilities, to overcome those things that restrict you, and work within limitations and boundaries. Sabre Airline Solutions has become the company that foresees what is going to happen, foresees the change in the industry pattern and that already has the capabilities to help airlines succeed when those changes come about.”