Sabre gains freedom, looks at expansion

Fort Worth-based Sabre, which provides computer reservations and information technology services for the airline industry, is looking at forming a number of strategic partnerships with companies in the financial services, retail and telecommunications industries, Mr. Hannigan said in an interview Wednesday.

Under the alliances, Sabre technology would serve as the engine that processes the information from these companies' Web sites.

Sabre is currently in "deep discussions" with a leading information technology consulting firm to take on that kind of role, Mr. Hannigan said.

Sabre technology currently serves as the engine for Web sites of 700 companies, but all of them are in the travel industry.

Sabre is also planning to step up its investment in technology companies. Although Sabre wouldn't disclose the current size of its investment, "it is meaningful and it is going to get bigger," Mr. Hannigan said.

Last month, Sabre invested an undisclosed amount in EncrypTix Inc., which has developed technology for delivering sensitive documents, such as airline tickets, over the Internet.
The initiatives were unveiled as Sabre became a fully independent company Wednesday, ending its 40-year-old ownership link with parent AMR, the Fort Worth-based owner of American Airlines Inc. AMR shareholders received 0.7 common shares of Sabre for each share of AMR owned on March 1.

Sabre shares rose $1.13 a share Wednesday to close at $48.38. AMR's stock price shot up $2.81 a share to end the day at $60.63, bolstered in part by a positive recommendation from a PaineWebber Inc. airline analyst.

However, AMR shares will be trading at a significantly lower price beginning Thursday, reflecting the spinoff of the company's 83 percent stake in Sabre.

One of Sabre's chief assets is its ownership interest in Travelocity.com Inc., the largest online travel booking site. Sabre has no plans to spin off its 70 percent stake in Travelocity.com, Mr. Hannigan said. Last week, Travelocity.com merged with Preview Travel IncThe Sabre spinoff, which was announced in December, is expected to help the airline reservations giant win new contracts from the nation's largest carriers. The spinoff also allows AMR to focus on its core airline operations.

About 40 percent of Sabre's $2.4 billion in 1999 revenue came from information technology outsourcing, which provides airlines with such tools as customer reservations, revenue management and passenger check-in systems. The other 60 percent came from Sabre's computer reservations business.

Over the next two to three years, Sabre plans to generate equal revenue from both businesses as more airlines decide to outsource their information technology needs, Mr. Hannigan said.
Sabre expects its information technology business to grow between 10 percent and 20 percent a year. Its competitors include IBM Corp. of Armonk, N.Y., and Plano-based Electronic Data Systems Corp.

Sabre is eager to expand its information technology business to reduce its reliance on revenue from its Sabre airline reservation system. More consumers are expected to book tickets on airlines' Web sites, bypassing travel agents who use the Sabre system.

Sabre's spinoff was marked by a company pep rally Wednesday at Texas Stadium in Irving. Nearly all of the company's approximately 5,600 employees in Dallas-Fort Worth attended the event, which was broadcast live to other Sabre employees the United States and Europe.