The global grounding of Boeing's 737 Max aircraft following two deadly crashes, combined with Jet Airways' suspension of operations, are expected to impact Sabre's revenue in 2019 by $40 million.
Those two external factors led the company to reduce its earnings expectations in 2019, Sabre said Tuesday during its most recent financial earnings call with investors. CFO Doug Barnett said the company now expects total revenue growth of 3% to 5% in 2019, approaching $4 billion. Previously, Sabre expected 2019 revenue to top $4 billion.
Sabre hosts Jet Airways' reservations system. The airline suspended operations earlier this month after lenders declined providing it with $218 million to keep operating.
Sabre CEO Sean Menke said, "While our GDS footprint in India is relatively small, we have already seen this impact overall GDS industry bookings in the Asia-Pacific region."
Bookings in that region were flat in the first quarter, Sabre reported. Bookings would have been up 1% excluding Jet Airways.
With regard to the global grounding of 737 Max aircraft, Menke said while rebookings on other aircraft have largely been possible and that there has been a "modest impact" on the industry.
The two airlines involved in the crashes, Lion Air and Ethiopian Airlines, are SabreSonic reservation systems customers, Menke said.
According to Menke, the impact has been "less pronounced" in North America and more concentrated in Europe. But considering the total capacity of the marketplace, he said, the impact is "not huge."
Barnett said Sabre still expects full-year revenue growth of 4% to 6% in its Travel Network business. While it previously expected its Airline Solutions business to grow 1% to 3%, considering the Jet Airways and 737 situations, that has been muted to a 2% to 4% decline in 2019.
In the first quarter of 2019, Sabre reported a revenue increase of 6.2%, to $1.1 million. Net income decreased 35.3%, which Sabre attributed to increased technology operating expenses and Travel Network incentive expense growth.
Sabre's stock was down more than 8% Tuesday morning.