Sabre Holdings - The Quest for New Business Models

            
 
Strategic Management|Management Strategy |Business Strategy Case Study|Business Strategy|Case Study|Case Studies

ICMR HOME | Case Studies Collection

Case Details:

Case Code : BSTR175
Case Length : 15 Pages
Period : 1995-2005
Organization : Sabre Holdings
Pub Date : 2005
Teaching Note :Not Available
Countries : India
Themes: Business Models | Growth factors and Challenges
Industry : Travel and Tourism

To download Sabre Holdings - The Quest for New Business Models case study (Case Code: BSTR175) click on the button below, and select the case from the list of available cases:

Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies

OR


Buy With PayPal

Amount to be paid:



Prefer to pay in another currency ?
Select Currency for Payment



Exchange Rates: Click Here
Delivery Details: Click Here



Price:

For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Shipping & Handling Charges extra

» Business Strategy Case Studies
» Case Studies Collection
» Business Strategy Short Case Studies
» View Detailed Pricing Info
» How To Order This Case
» Business Case Studies
» Case Studies by Area
» Case Studies by Industry
» Case Studies by Company

Custom Search



Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



Chat with us

Strategic Management Formulation, Implementation, & Control, 12e

Please leave your feedback

Leave Your Feedback

ICMR India ICMR India ICMR India ICMR India RSS Feed

<< Previous

EXCERPTS

The Global Distribution System

The Sabre system was developed to address two major data processing problems in the AA reservation process - 1) keeping track of the number of seats sold on the numerous flights operated by the airline and 2) informing travel agents of the ticket availability.

The evolution of Sabre from a simple reservation system into a distribution channel for travel products & services occurred mainly because of the new opportunities in the US aviation industry after deregulation in 1978. Civil aviation in the US had been under the regulation of the Civil Aeronautics Board (CAB) between 1938 and 1978. The CAB regulated market entry, decided airline routes and set airfares for these routes. This system of regulation kept airfares high, and thus demand was not stimulated. Airlines were still profitable as the CAB restricted competition. However, the economic recession in the early 1970s led to heavy losses for the airlines. There was now increasing demand for affordable air travel and this, together with declining airline profitability, forced the US government to deregulate the airline industry in 1978...

Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

Impact of the Internet

The popularity of the Sabre system and the subsequent jump in the number of travel agents led to a situation where commissions began to account for a major chunk of airline distribution costs. The IATA estimated in 1996 that commissions paid to agents formed 7.5 % of the total airline operating costs and 42.8% of total distribution costs.

Commenting on the agent commissions, Richard Anderson, CEO of Northwest Airlines said, "CRS fees have the wrong sort of incentives. The agency (travel agency) pushes a button and never sees the bill. We get the bill and that really doesn't work."Airlines began to realize the need to put a cap on the expenditure incurred on commissions.

They understood that cutting out intermediaries would go a long way in reducing distribution costs. The Internet revolution in the 1990s presented airlines with an opportunity to cut out intermediaries and get to the customer directly. Low-cost airlines started offering flight information and reservations through their websites...

Excerpts Contd... >>


 

Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Work Books, Case Study Volumes.