eolesen
Veteran
- Jul 23, 2003
- 15,909
- 9,359
At the time of the spin, AMR shareholders received shares in Sabre, so it's possible that some of the execs who held AMR stock prior to 1996 would have some Sabre stock at the time. It was most likely sold off after the spin took place, when the company was valued at $6.7B instead of the current $4B.
It's also possible that some of the existing 401K portfolios contain Sabre stock, but I doubt it, given that the stock has been stuck in the $20's since 2002; it was still trading in the $40's after 9/11, having peaked in the $60's right after AMR sold off its controlling interest.
This could be interesting to watch going forward, especially as GDS consolidation continues to occur. Last week, Worldspan was acquired for $1.4B by Travelport, who also owns Orbitz and Galileo (previously known as Apollo when UAL owned it). Combining Worldspan and Galileo would result in just three major GDS's -- Sabre, and Amadeus being the other two.
While GDS consolidation might not appear to be a big problem for the airlines, today they negotiate booking fees with each GDS. As the number of GDS's shrink, so does the airlines' ability to strong-arm them.
Also.. this does have some implications for AMR in the future, since Sabre is so intertwined into AMR's operations. A new owner means that some of the sweetheart deals AMR might have had with Sabre are subject to being re-evaluated, especially since the bulk of the services contracts between AMR and Sabre expire in either 2008 or 2009, and AMR has yet to renew the contract. They have issued a RFP for reservations, ticketing, check-in, and other services currently done in Sabre PSS/RES today, but there's been no official announcement of whether or not Sabre will keep that business or if it will go to one of the other two companies who responded to the RFP.
