Business is still not close to where it was in 2019, but it's getting there — slowly.
Even as it grapples with a slow recovery, Sabre reported September as its strongest month for air booking volumes since the start of the pandemic primarily because of increased international travel.
The Texas-based airfare distribution and airline operational software company shared the update during a quarterly earnings call on Wednesday.
The company reported 68.8 million air bookings in the third quarter, a 47 percent increase from the previous year and a 59 percent recovery compared to 2019. Much of that has come from recovery in the Asia Pacific region, said CEO Sean Menke during the call.
Sabre’s business primarily relies on business and corporate travel, especially international or long-haul travel, which has been slower to rebound.
The company is still struggling financially following the pandemic downturn, however, with a $140.7 million net loss this quarter attributable to common stockholders. But along with the slowly returning business travel, executives highlighted a couple of other areas they expect to bear fruit in the coming months.
Revenue this quarter was $663 million, a 50 percent increase from the same time in 2021.
Full Technology Transfer
Sabre fully immigrated all of its SynXis software systems to Google Cloud. That includes its property management and central reservation software.
“This important accomplishment is expected to make our hospitality business more agile, improve velocity and unlock the benefits of greater scalability provided by Google Cloud,” said Kurt Ekert, president of Sabre. “Additionally, we expect that the cost bubble associated with these actions will abate by year-end, setting up for better financial performance for hospitality solutions in 2023.”
Skift reported in September that Sabre may be looking to sell its SynXis platform, but there was no mention of that during the call. Last year, Sabre sold its AirCentre unit, which provided tools for airline crew management, for $392 million.
Sabre also moved all of its air shopping capabilities from Amazon Web Services to Google Cloud, the end of a project that started in 2017.
“We now have the processing capacity we expect to need and can focus additional energy on product enhancements that we expect will generate additional value for Sabre and our customers,” Ekert said.
The company is continuing to work on migrating its customer reservations database and information to Google Cloud. Sabre decommissioned and emptied one data center in Texas, and it has decommissioned more than 70 percent of servers in its three other data centers in the state.
“As we have outlined before, this technology transformation is a key driver of the expected savings and margin improvement outlook that we have provided for 2025,” Ekert said.
Sabre expects Google Cloud to represent about 98 percent of its computing volume by the end of 2024. The monthly server cost on Google Cloud is less than half of what it was at the data centers and about 15 percent less than through Amazon Web Services. Sabre expects additional savings will come with optimization of its systems on Google Cloud.
Executives are starting to see a benefit from business partnerships made over the last year. Paired with a couple more partnerships made last quarter, they expect a benefit to Sabre’s bottom line next year.
The company in late October said it has strengthened its relationship with corporate travel management company BCD Travel through a long-term technology agreement, through which the two companies plan to invest in joint tech development over the coming years.
“We expect booking conversions to accelerate in Q4 and through the first half of 2023 in connection with BCD and our previously announced expanded relationships with American Express Global Business Travel and Hopper,” Ekert said.
Sabre and Hopper, the online travel agency, announced an expansion of their partnership in February. Sabre and American Express Global Business Travel made a “multi-million dollar” last December.
Ekert added that the company is seeing initial conversation from the partnership with GBT, and he expects those to accelerate this quarter and next year along volume from the other partnerships.
“Collectively, this is a tailwind for 2023,” Ekert said.
Sabre also said in October that it has renewed distribution agreements with American Airlines and United Airlines.
CORRECTION: An earlier version of this story incorrectly reported that Sabre saw 68,761 air bookings in the third quarter. It was 68.8 million.
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Photo credit: Sabre renewed its partnership with American Airlines, the company reported during its third quarter earnings call. TJDarmstadt / Wikimedia Commons