Amadeus keeps winning, this morning announcing the signing of a small ~12m PB carrier to the full PSS suite. Sabre had a toe hold at this airline thanks to having won them as a beta partner for Sabre's AirVision Commercial Analytics (real-time data solution for daily revenue performance management) in late 2016. Based on our due diligence we are more concerned that Amadeus’ next victory could be closer to home, potentially with a tier two US carrier.
No one said this would be a straight line but we think Sabre has ~50% upside in the next 18 months thanks to:
- New transaction processing technology that makes Sabre competitive in GDS with key accounts, and also helps improve Sabre’s cost per booking
- Modernized software architecture for Airline Solutions accelerates product time to market, increases R&D efficiency, and expands TAM
- Unrecognized, improving cash generation
Sore spots:
- Macro travel is up and down (up recently) and we track volume closely
- Innovation around NDC may require M&A for Sabre (could be a good thing)
- Amadeus still winning in AS head to head in 2018, 2019 TBD
- Hotels coming to end of large Wyndham deployment by YE 2018, they need a big win to keep revenue momentum going in 2019-2021 (need some urgency around this business)
We like it.
