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Sabre (SABR) Signs New Distribution Deal With Qatar Airways

Sabre's (SABR) new distribution agreement with Qatar Airways will enable it to leverage Sabre's travel marketplace for enhancing its retailing capabil...

This story originally appeared on Zacks

Sabre Corporation SABR recently strengthened its long-term relationship with Qatar Airways, a multiple award-winning airline from the Middle-East, by inking a new distribution agreement. Per the deal, Qatar Airways will be distributing its offerings to worldwide travel agencies through Sabre’s travel marketplace. The company has over 425,000 agency partners globally.

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Using Sabre’s New Distribution Capability (NDC)-enabled consistent end-to-end workflow solution, the Doha-based airline intends to enhance its retailing capabilities, and provide new and personalized offers to corporations and travel agencies worldwide.

The leading travel-related software and technology provider has its customer base spread over 160 nations globally. It is one of the largest marketplaces in the world that manages approximately $260 billion worth of global travel spending annually.

The collaboration with Qatar Airways reflects the reliability of Sabre’s Global Distribution System platform and Beyond NDC Program. This, in turn, is likely to aid the company in expanding its customer share in the Airlines Solutions segment.


Back-to-back Contract Wins

Following a severe downturn in its earnings due to the pandemic, Sabre has been showing signs of a turnaround lately with consecutive deals wins from major global airlines, hoteliers and travel agencies. Case in point, Sabre recently expanded its SabreSonic passenger service system deal with Alaska Airlines.

Before that, the company signed a multi-year contract with the UK-based Polani Travel Group. Per the deal, Polani Travel Group will utilize Sabre’s technology platform to support growth plans and future innovations. In July, it partnered with Curator Hotel & Resort Collection to provide hospitality solutions.

In June, Sabre entered into a deal with Indonesia's Lion Air Group for enhancing its ancillary revenue capabilities and upgrading its performance with technological assistance.  SabreSonic was selected by SCAT Airlines in late June.

In May, the company entered into a transformative global distribution agreement with Delta Air Lines to provide commercial and technological innovation.

Earlier in 2021, it signed an agreement with JetBlue Airways Corporation for assisting technology migration to Sabre’s Revenue Optimizer solution.

With a rise in vaccination efforts and lifting of restrictions across the world, the industry is gradually recovering from the pandemic woes. Hence, Sabre is well-poised to capitalize on the improving market scenario for the travel industry.

The company’s net air bookings improved 17 percentage points sequentially in second-quarter 2021. Sabre has seen a significant rise in global hotel bookings and air bookings in the company’s largest region, North America.

Though its latest financial results reflect significant year-over-year improvement in gross bookings and reservation-system transactions, the metrics are still down by over 50% from second-quarter 2019. Further, Sabre refrained from issuing an outlook citing uncertainty about the impact of the pandemic on its financials, which is disappointing.

Additionally, with the emergence of the more contagious coronavirus variant — Delta — several parts of the world, including India, Australia, Indonesia and Japan, are grappling with a massive spike in infection rates, leading to stringent restrictions. Even some parts of the United States are witnessing the Delta variant outbreaks. This could affect the overall travel industry as governments across the world may impose travel restrictions again.

Zacks Rank & Key Picks

Sabre currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector are Avnet AVT, Shopify SHOP and Paycom Software PAYC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate of Avnet, Shopify and Paycom Software are pegged at 25.4%, 25% and 25%, respectively.

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