Sabre (computer system)

Sabre Global Distribution System (GDS), owned by Sabre Holdings, is used travel agents around the world with more than 400 airlines, 220,000 hotels, 42 car rental brands, 38 rail providers and 17 cruise lines. The Sabre GDS enables companies such as American Airlines, American Express, BCD Travel, Carlson Wagonlit Travel, Hogg Robinson Group (HRG), Expedia, Holiday Autos, Zuji, LastMinute, JetBlue, GetThere and Travelocity and past airlines such as Air Jamaica[1] to search, price, book, and ticket travel services provided by airlines, hotels, car rental companies, rail providers and tour operators.

Sabre Holdings aggregates airlines, hotels, online and offline travel agents and travel buyers. The company is organized into three business units:

The company is headquartered in Southlake, Texas, and has 10,000 employees in 60 locations around the world with data-centers in global locations.

History

Sabre Holdings' history starts with SABRE (Semi-automated Business Research Environment), a computer reservation system which was developed to automate the way American Airlines booked reservations.

In the 1950s, American Airlines was facing a serious challenge in its ability to quickly handle airline reservations in an era that witnessed high growth in passenger volumes in the airline industry. Before the introduction of SABRE, the airline's system for booking flights was entirely manual, having developed from the techniques originally developed at its Little Rock, Arkansas reservations center in the 1920s. In this manual system, a team of eight operators would sort through a rotating file with cards for every flight. When a seat was booked, the operators would place a mark on the side of the card, and knew visually whether it was full. This part of the process was not all that slow, at least when there were not that many planes, but the entire end-to-end task of looking for a flight, reserving a seat and then writing up the ticket could take up to three hours in some cases, and 90 minutes on average. The system also had limited room to scale. It was limited to about eight operators because that was the maximum that could fit around the file, so in order to handle more queries the only solution was to add more layers of hierarchy to filter down requests into batches.

American Airlines had already attacked the problem to some degree, and was in the process of introducing their new Magnetronic Reservisor, an electromechanical computer, in 1952 to replace the card files. This computer consisted of a single magnetic drum, each memory location holding the number of seats left on a particular flight. Using this system, a large number of operators could look up information simultaneously, so the ticket agents could be told over the phone whether a seat was available. On the downside, a staff member was still needed at each end of the phone line, and actually handling the ticket still took considerable effort and filing. Something much more highly automated was needed if American Airlines was going to enter the jet age, booking many times more seats.

It was during the testing phase of the Reservisor that a high-ranking IBM salesman, Blair Smith, was flying on an American Airlines flight from Los Angeles back to IBM in New York City in 1953.[2] He found himself sitting next to American Airlines president C. R. Smith.[3] Noting that they shared a family name, they began talking.[4]

Just prior to this chance meeting, IBM had been working with the United States Air Force on their Semi Automatic Ground Environment (SAGE) project. SAGE used a series of large computers to coordinate the message flow from radar sites to interceptors, dramatically reducing the time needed to direct an attack on an incoming bomber. The system used teleprinter machines located all around the world to feed information into the system, which then sent orders back out to teleprinters located at the fighter bases. It was one of the first online systems.

It was not lost on either man that the basic idea of the SAGE system was perfectly suited to American Airlines' booking needs. Teleprinters would be placed at American Airlines' ticketing offices to send in requests and receive responses directly, without the need for anyone on the other end of the phone. The number of available seats on the aircraft could be tracked automatically, and if a seat was available the ticket agent could be notified instantly. Booking simply took one more command, updating the availability and even printing out the ticket for them.

Only 30 days later IBM sent a research proposal to American Airlines, suggesting that they really study the problem and see if an "electronic brain" could actually help. They set up a team consisting of IBM engineers led by John Siegfried and a large number of American Airlines' staff led by Malcolm Perry, taken from booking, reservations and ticket sales, calling the effort the Semi-Automated Business Research Environment, or SABRE.

A formal development arrangement was signed in 1957, and the first experimental system went online in 1960, based on two IBM 7090 mainframes in a new data center located in Briarcliff Manor, New York. The system was a success. Up until this point, it had cost the astonishing sum of $40 million to develop and install (about $350 million in 2000 dollars). The SABRE system by IBM in the 1960s was specified to process a very large number of transactions, such as handling 83,000 daily phone calls.[5] The system took over all booking functions in 1964, at which point the name had changed to the more familiar SABRE.[6]

In 1972, the system was migrated to IBM System/360 systems in a new underground location in Tulsa, Oklahoma. Max Hopper joined American Airlines in 1972 as director of Sabre, and pioneered its use.[7] Originally used only by American Airlines, the system was expanded to travel agents in 1976.

With SABRE up and running, IBM offered its expertise to other airlines, and soon developed Deltamatic for Delta Air Lines on the IBM 7074, and PANAMAC for Pan American World Airways using an IBM 7080. In 1968, they generalized their work into the PARS (Programmed Airline Reservation System), which ran on any member of the IBM System/360 family and thus could support any sized airline. The operating system component of PARS evolved into ACP (Airlines Control Program), and later to TPF (Transaction Processing Facility). Application programs were originally written in assembly language, later in SabreTalk, a proprietary dialect of PL/I, and now in C and C++.

By the 1980s, SABRE offered airline reservations through the CompuServe Information Service, and the Prodigy Internet Service GEnie under the Eaasy SABRE brand.[8][9] This service was extended to America Online in the 1990s.

American and Sabre separated on March 15, 2000. Sabre had been a publicly traded corporation, Sabre Holdings, stock symbol TSG on the New York Stock Exchange until taken private in March 2007. The corporation introduced the new logo and changed from the all-caps acronym "SABRE" to the mixed-case "Sabre Holdings", when the new corporation was formed. The Travelocity website, introduced in 1996, was owned by Sabre Holdings. Travelocity was acquired by Expedia in January 2015.[10] Sabre Holdings' three remaining business units, Sabre Travel Network, Sabre Airline Solutions and Sabre Hospitality, today serves as a global travel technology company. The system connects more than 57, 000 travel agents and millions of travelers with more than 400 airlines, 90,000 hotels, 30 car-rental companies, 200 tour operators, and dozens of railways, ferries and cruise lines.

Controversy

A 1982 study[11] by American Airlines found that travel agents selected the flight appearing on the first line more than half the time. Ninety-two percent of the time, the selected flight was on the first screen. This provided a huge incentive for American to manipulate its ranking formula, or even corrupt the search algorithm outright, to favor American flights.

At first this was limited to juggling the relative importance of factors such as the length of the flight, how close the actual departure time was to the desired time, and whether the flight had a connection, but with each success American became bolder. In late 1981, New York Air added a flight from La Guardia to Detroit, challenging American in an important market. Before long, the new flights suddenly started appearing at the bottom of the screen.[12] Its reservations dried up, and it was forced to cut back from eight Detroit flights a day to none.

On one occasion, Sabre deliberately withheld Continental's discount fares on 49 routes where American competed.[13] A Sabre staffer had been directed to work on a program that would automatically suppress any discount fares loaded into the computer system.

Congress investigated these practices and in 1983 Bob Crandall, president of American, was the most vocal supporter of the systems. "The preferential display of our flights, and the corresponding increase in our market share, is the competitive raison d'être for having created the system in the first place," he told them. Unimpressed, in 1984 the United States government outlawed screen bias.

Even after biases were eliminated, travel agents using the system leased and serviced by American were significantly more likely to choose American over other airlines. The same was true of United and its Apollo system. The airlines referred to this phenomenon as the "halo" effect.[14]

The fairness rules were eliminated or allowed to expire in 2010. By then, none of the major distribution systems was majority owned by the airlines.[15]

In 1987 Sabre's success of selling to European travel agents was inhibited by the refusal of big European carriers led by British Airways to grant the system ticketing authority for their flights even though Sabre had obtained IATA Billing and Settlement Plan (BSP) clearance for the UK in 1986. American brought High Court Action which alleged that after the arrival of Sabre on its doorstep British Airways immediately offered financial incentives to travel agents who continued to use Travicom and would tie any override commissions to it.[16] Travicom was created by Videcom, British Airways and British Caledonian and launched in 1976 as the world's first multi-access reservations system based on Videcom technology which eventually became part of Galileo UK. It connected 49 subscribing international airlines (including British Airways, British Caledonian, TWA, Pan American World Airways, Qantas, Singapore Airlines, Air France, Lufthansa, SAS, Air Canada, KLM, Alitalia, Cathay Pacific and JAL) to thousands of travel agents in the UK. It allowed agents and airlines to communicate via a common distribution language and network, handling 97% of UK airline business trade bookings by 1987.

British Airways eventually bought out the stakes in Travicom held by Videcom and British Caledonian, to become the sole owner. Although Sabre's vice-president in London, David Schwarte, made representations to the U.S. Department of Transportation and the British Monopolies Commission, British Airways defended the use of Travicom as a truly non-discriminatory system in flight selection because an agent had access to some 50 carriers worldwide, including Sabre, for flight information.[17]

Sabre, Expedia, Orbitz and some consumer advocates think that American's tactics with Direct Connect are aimed at making fare comparisons harder for online travel sites and for customers. American says its new system lowers its costs and lets it display its increasingly complex airfare and travel products to consumers. Especially the generation of ancillary revenue plays an important role behind American Airlines' effort to establish Direct Connects.[18]

See also

References

  1. ↑ Air Jamaica and Sabre Sign Agreement for Advanced Technology Systems For Seamless Passenger Experience
  2. ↑ Different sources disagree on many of the dates. Some place the project starting in 1953, some 1957, some place the original system in Manhattan, others Briarcliff. For instance this CNN story places the start date in 1960 and the cost at $150 million. The Serling book uses November 5, 1959 as the date of the announcement of the joint development and 1962 as the date of the first SABRE reservation taken at the Hartford Reservations office.
  3. ↑ Oral history interview with R. Blair Smith. Charles Babbage Institute, University of Minnesota, Minneapolis. Smith discusses how a chance meeting with C. R. Smith, president of American Airlines, eventually led to the development of the SABRE system.
  4. ↑ The official corporate history of American Airlines, Eagle, by Robert Serling, published in 1985 by St. Martin's/Marek, recounts the story of the meeting on page 347, and indicates it was between C. R. Smith and IBM president Thomas J. Watson.
  5. ↑ Cf. Head, Robert V. 2002
  6. ↑ After the name of the system was changed to Sabre, American Airlines' official definition of the acronym was "Semi-Automated Business Research Environment".
  7. ↑ John Desmond. Max Hopper knows Sabre's 'software guts': American pushing limits of software at 2,000+ TPS – transactions per second. Software Magazine. February, 1989.
  8. ↑ Philip S. Gutis (1989-12-23). "More Trips Start at a Home Computer". New York Times.
  9. ↑ Peter H. Lewis (1992-01-12). "Booking With a Computer". New York Times.
  10. ↑ Michael J. De La Merced (2015-01-23). "Expedia Buys Travelocity for $280 million in cash". New York Times.
  11. ↑ "November Line of Sale Analysis", memo to R. E. Murray from S. D. Nason, American Airlines, Dec. 3, 1981.
  12. ↑ "Motion of the Justice Department for an Extension of Time," in "Re Advance Notice of Proposed Rulemaking – Airline Computer Reservations System," Docket 41686, Civil Aeronautics Board, Oct. 5, 1983
  13. ↑ Memo from J. L. Ott to L. A. Iovinelli et al., "Subject: Continental Fares", American Airlines, Dec. 1, 1981.
  14. ↑ Sabre (as with other Global Distribution Systems, such as Amadeus, Galileo, and Worldspan) facilitates the sale of seats under airline codeshare agreements.
  15. ↑ The original notice of rule making is available from the U.S. Department of Transportation at http://web.archive.org/web/20070406033413/http://www.dot.gov:80/affairs/CRSrule.htm. Archived from the original on April 6, 2007. Retrieved May 4, 2007. Missing or empty |title= (help), and a PDF document of the final rule is at (PDF) http://web.archive.org/web/20060702174342/http://www.travelweekly.com:80/specialreports/GDSrule.pdf. Archived from the original (PDF) on July 2, 2006. Retrieved May 4, 2007. Missing or empty |title= (help).
  16. ↑ "Flight Global". Flight Global. 1987-10-10. Retrieved 2011-11-03.
  17. ↑ "Flight Global". Flight Global. 1988-02-27. Retrieved 2011-11-03.
  18. ↑ Strauss, Michael (2010): Value Creation in Travel Distribution, http://www.amazon.com/dp/0557612462

Further reading

  • Robert V. Head, Real-Time Business Systems, Holt, Rinehart and Winston, New York, 1964. "This book embodies many of the lessons learned about new technology application management while working on the ERMA and Sabre systems".
  • D.G. Copeland, R.O. Mason, and J.L. McKenney, "Sabre: The Development of Information-Based Competence and Execution of Information-Based Competition," IEEE Annals of the History of Computing, vol. 17, no. 3, Fall 1995, pp. 30–57.
  • R.D. Norby, "The American Airlines Sabre System," in James D. Gallagher, Management Information Systems and the Computer, Am. Management Assoc. Research Study, 1961, pp. 150–176.
  • IBM General Information Manual, 9090 Airlines Reservation System, 1961.

External links

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