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Bound For Industry Upheaval

The Internet, a service-oriented architecture, BI reporting tools, CRM and ERP all play roles in the remaking of travel reservations firm Sabre Holdings.
Sabre's strength in reservations hosting was a key consideration for Aeroflot Russian International Airlines when it decided to update its aging reservations and distribution systems, which relied on software from Sita, a Swiss vendor of software for airlines, airports, and aerospace firms. Aeroflot considered new software offered by Sita as well as Amadeus, but it signed a multimillion-dollar software, hosting, and distribution deal with Sabre Airline Solutions in May, in part because Sabre's more-mature technology would be more reliable while operating in Russia's tenuous E-business infrastructure, CIO Sergey Kiryushin says. "We need to start next April, so we need to get an advantage as soon as possible," he says.

Sabre Airline Solutions offered Kiryushin the most-favorable terms, he says, plus Aeroflot already was using the company's revenue-management, pricing, and fleet-management tools. Sabre's architecture upgrade sent a message to Kiryushin that the company plans to make its distribution system as cutting edge as its software and hosting products. Aeroflot's access to the Sabre Travel Network will enable some Russian travel agencies to access worldwide travel content via a global distribution system for the first time.

But perhaps the most-important and fastest-changing relationship for Sabre is with travel agents. Historically, agencies used Sabre technology, but it was paid for primarily by the fees paid by airlines and other travel-service providers. Brown, the CIO at Carlson Wagonlit, says agencies like his and American Express Corporate Services have evolved into essentially outsourced corporate-travel-management departments. That means they're looking for better tools to operate within rules dictated by their clients. So, as Sabre and its competitors modernize and begin building more capabilities into their distribution systems, agencies expect that they'll be asked to pay for those features.

Sabre wants to put more data at travel agents' fingertips, says Hugh Jones, North American senior VP for Sabre Travel Network

Sabre wants to put more data at travel agents' fingertips, says Hugh Jones, North American senior VP for Sabre Travel Network.
Sabre is working hard to lure travel agents into a new way of gathering fares and availability information. The company, which once provided agents with hardware and connectivity to the Sabre system, is preparing to roll out its next-generation agent tool: a portal designed to help travel agents in their continuing effort to be seen as valuable travel experts. The portal will let agents use the DOS-like "green screen" interface and legacy commands with which they've become familiar over the years or a Web-based interface that will tap the new architecture to deliver things that can help agents be travel experts: hotel photos, air-hotel-car packages, and easy point-and-click navigation. "We've heard loud and clear from our agents that they want to continue to use legacy commands," says Hugh Jones, North American senior VP for Sabre Travel Network. "At the same time, we want to put additional information at their fingertips." Eventually, Sabre will transition entirely to the Web-based view.

Winning over travel agents to new services will be vital to Sabre as its transaction revenue moves to other channels. Yet these agencies aren't going to be easy pickings. Already, Carlson Wagonlit has changed several ways that its 8,000 agents interact with the global distribution systems. Carlson developed its own interface to replace the green screen by delivering information from Amadeus, Galileo, Sabre, and Worldspan through a single display. And for the past three years, it's been using its own platform, called Symphonie, to connect directly to the central reservation systems of its highest-volume airlines: American, Continental, Delta, United, and US Airways. Those direct connections cut costs for the carriers by eliminating fees paid to global distribution systems, in exchange for which Carlson gets slightly better fares from the carriers, resulting in lower costs for its business clients. Similar direct-connect technology is available from Navitaire Inc., whose applications are designed specifically for airlines.

The new Sabre system also lets suppliers automate the loading of airfares from central reservation systems, along with the accompanying rules--requirements such as 14-day advance purchase or Saturday night stay. Automating that process, which formerly had a manual component, will mean fewer lags between an airline creating a requirement and it showing up on travel-agency terminals--avoiding costs that travel agencies end up eating when an agent sells a fare too low because of not knowing a new rule.

It's hard to come up with an industry that's changing more profoundly than the travel sector because of new business technology and the increased information flow it permits. Today, Sabre is a company that, like Wal-Mart Stores Inc. in retail or General Motors Corp. in the car business, by nature of its size and position in the market helps drive technology standards in its sector. It's a company others in the travel industry have to deal with in one way or another.

Whether Sabre stays that way will be decided in the coming years as many companies make the technical transition to service-oriented architectures, embracing efforts such as the Open Travel Alliance's industry-specific version of XML and the new business models that it permits. "The problem Sabre is trying to solve by updating its system is the same thing we're trying to do with our legacy systems," says John Turato, VP of technology for Cendant Car Rental Group. "We're all working on the same root challenge."

Which companies will emerge as winners after all those changes is up in the air.

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