The Rising Influence of Rising Affluence

[mrholty]

If they are anybit successful with this you you basically have a 30 year investment horizon.

Back in the 1970s American Airlines created SABRE in which it sold tickets to customers (travel agents at the time), it managed a part swapping inventory for airlines and it reconciled the intra-airline tickets. Airlines saw the problem with every travel agent using Sabre as the sorting function put American Airlines on top and most purchases were made on the first screen they all quickly came out with their own competition which they gave to travel agents (Galileo was Delta's). Eventually the gov't placed restrictions on how the systems could rank flights by time or price taking away an advantage to Delta, United and American (the owners of the three systems). While the internet took away the front-end the back-office items that Sabre provides are so integrated at every airline around the world it basically hard for any airline to pull out. Its a great profitbale product that once its fixed costs have been paid for its hard for airlines to justify moving away from it even for newer, better tech.

I've seen analysts question this business line of IBM but once you get past the upfront costs you have a 30 year license stream if they integrate it successfully.