Sabre (american Airlines)

American Airlines is the world's largest airline. It serves 250 cities in over 40 countries with more than 4,000 daily flights. The combined network fleet numbers more than 1,000 aircraft. American's award-winning Web site, AA.com, provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the "oneworld" Alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members serve more than 600 destinations in over 135 countries and territories.

In 1934, American Airways Company was acquired by E.L. Cord, who renamed the company "American Air Lines". Cord hired Texas businessman Cyrus Rowlett Smith to run the company.

C.R Smith was committed to change the airline into a passenger transportation business. To do so and beat competition he decided to: improve his service and excel in marketing. Realizing the importance of flight attendance he started a training program for his stewardess and other employees.

For more than 40 years, Sabre Holdings has transformed the airline industry through technological advancement. The first passenger reservations system offered by Sabre, installed in 1960, marked a dramatic technological leap forward for the airline industry, automating one of its key business areas. In the following years, Sabre Airline Solutions pioneered technological advances for the industry in areas such as revenue management, pricing, flight scheduling, cargo, flight operations and crew scheduling. And not only did we help invent electronic commerce for the travel industry, the company holds claim to progressive solutions that defined -- and continue to revolutionize -- the travel and transportation marketplace. The system was developed in order to help American Airlines, who were facing a serious problem by the 1950s. Their system for booking flights was entirely manual, having developed from the techniques originally developed at their Little Rock, Arkansas reservations center in the 1920s. Their system used a rotating file with cards for every flight, which a team of eight operators would sort through. If a seat was booked they 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 weren't 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 for growth. 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.

In the US Sabre had to face many other systems from AA competitors such as Apollo of United Airlines, Pars of the TWA or Soda of eastern airlines. The first step before trying to enter the European market was conquering the US market by using there CRS service.

In 1985 AA has 13% of the market share in the US followed by United Airlines 12% and Eastern 10%. The AA company has 5 main competitors in the US. One of the main points to acquire the market was the CRS service.

I believe that AA had skills that other companies didn't have such as the quality of there service and a size that made them go through the financial problems that all airline companies had after the deregulation act. AA was one of the only company to offer the big cargo planes and small planes.

This competition takes place in a special context because of the deregulation act:

Since 1938, the federal Civil Aeronautics Board (CAB) had regulated all domestic air transport as a public utility, setting fares, routes, and schedules. The CAB promoted air travel, for instance by generally attempting to hold prices down in the short-haul market, to be financed by higher fares in the long-haul market. The CAB was also obliged to ensure that the airlines had a reasonable rate of return.

It also earned a reputation for bureaucratic satisfaction; airlines were subject to lengthy delays when applying for new routes or fare changes, which were not often approved.

This rigid system encountered tremendous pressure in the 1970s. The 1973 energy crisis and stagflation radically changed the economic environment, as did technological advances such as the jumbo jet. Most of the major airlines, whose profits were virtually guaranteed, favored the system. But passengers forced to pay escalating fares did not, nor do communities which financed air service at ever-dearer rates. Congress became concerned that air transport in the long run might follow the nation's railroads into trouble; in 1970 the Penn Central railroad had collapsed in what was then the largest bankruptcy in history, resulting in a huge taxpayer bailout in 1976.

A 1996 Government Accounting Office report found that the average fare per passenger mile was about 9% lower in 1994 than in 1979. Between 1976 and 1990 the paid fare had declined approximately 30%. Passenger loads have risen, partly because airlines can now transfer larger aircraft to busier routes and replace them with smaller ones on shorter, low-traffic routes.

However, these benefits of deregulation have not been evenly distributed through the national air transportation network. Costs have fallen more dramatically on heavily trafficked, longer-distance routes than on shorter, lighter ones.

Exposure to competition led to heavy losses and conflicts with labor unions at a number of carriers. Between 1978 and mid-2001 nine major carriers including Eastern, Midway, Braniff, Pan Am, Continental, America West Airlines, and TWA and over 100 smaller airlines had gone bankrupt or been liquidated--including most of the dozens of new airlines founded in deregulation's aftermath.

For the most part, smaller markets did not suffer the loss of service predicted by some opponents of deregulation. However, until the advent of low-cost carriers, point-to-point transit declined in favor of a more pronounced hub-and-spoke system. The larger hubs were served with larger aircraft, the spokes with smaller. While more efficient for serving smaller markets, this system has also allowed some airlines to drive out competition from their "fortress hubs." The growth of low cost carriers such as Southwest Airlines has brought more point to point service back into the United States air transport system, and contributed to the development of a wider range of aircraft types adapted to markets of different sizes.

AA has survived the deregulation

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