Following the U.K.’s rejection of the Sabre-Farelogix combination, Sabre has a number of paths to pursue the development of New
Distribution Capability (NDC).
However, there doesn’t appear to be a rush for Sabre to make
its next move because the troubled airline industry probably isn’t too
concerned about delivering rich content and personalized offers when
hardly anyone is flying during the coronavirus crisis.
“Particularly now, with the virus and so on, I think the
airlines are going to be looking at basic services, not looking at [the ability
to] up-sell and cross-sell fliers,” said Phocuswright senior technology analyst Bob
Offutt.
When the industry normalizes and if NDC re-emerges as an
important project for airlines and distributors, Offutt said Sabre has a business
unit, Sabre Labs, that could deliver new technologies to match what Farelogix
brings to the table.
Then again, Fareloigx could still be a part of Sabre’s
future. Sabre could take a strategic interest in Farelogix, giving Sabre a
“significant, meaningful stake” in the company but enabling Farelogix to remain
a separate company, noted travel industry analyst Henry Harteveldt of Atmosphere
Research Group.
Sabre isn’t likely to proceed with the Farelogix acquisition
in the U.S. while not offering Farelogix products in the U.K. (Sabre won the
right to buy Farelogix in the U.S. by winning its antitrust
lawsuit against the Department of Justice.)
“I don’t think that’s very practical,” Harteveldt said. “I
think the whole point of this is to be global.”
Sabre could break off the acquisition entirely, owing
Farelogix a breakup fee, Harteveldt said. Then, Sabre could develop solutions
internally or pursue another company to help Sabre achieve its NDC goals.
NDC was the major factor in Sabre’s proposed acquisition of
Farelogix. Without Farelogix, Harteveldt said Sabre “definitely lags key
competitors.”
The big question: Where will NDC rank in importance in the
coming months?
“Once people get back and airlines are able to start
operating again in a more normal environment, I think their technology and
commercial teams are going to be able to make the case for NDC-related
investment,” Harteveldt said. “The question is, where in the hierarchy of
importance will that fall? Because, for example, there may be certain safety-related
technology investments. There may be investments that can help improve
scheduling or take some costs out. There’s always a series of trade-offs that
have to be made in evaluating where do you invest and how do you prioritize
technology products.”