Sabre Pushes Through Setbacks Toward Positive Recovery

25.08.2023 - 14:09 / skift.com / Justin Dawes / Kurt Ekert

Despite uneven demand in 2022, Sabre expects continued overall recovery leading to positive free cash flow for the company by the end of this year. 

Uneven demand — though higher overall — was driven by a resurgence in Covid-19 cases, airline and airport operational constraints, airline capacity limits, and regional travel restrictions, Sabre executives described during an earnings call on Wednesday. 

The Texas-based company provides operational software and distribution services to travel agencies, airlines, and hotels.

The number of bookings in the fourth quarter took a hit, primarily in corporate travel and the Asia Pacific region, but those numbers seem to be returning to the recovery trajectory and getting stronger each week. Another hit: Sabre expects a headwind this year of about $100 million in IT solution revenue, primarily because of a new Russian law that forced the company to end those operations there. 

Overall, any setbacks seem to have been one-time or temporary, said Kurt Ekert, president of Sabre. The company has calculated those into its projections and is continuing to move forward with other investments, ready for any other unexpected events over the next year. 

“As we look at the balance of 2023, we are optimistic on overall demand and recovery levels moving forward, but prepared for the possibility of further unevenness in 2023,” Ekert said. 

“Accordingly, we will be responsive to changes in volume growth and control cost as needed to focus on achieving positive free cash flow this year. And while we will adjust as needed to external market conditions, we remain focused on the key long-term strategic opportunities for our business.”

Sabre counted 637 million passengers boarded in 2022, an increase of 30 percent from the previous year. 

The company expects to complete this year with revenue between $2.8 billion and $3 billion. That number was $2.5 billion in 2022, an increase of 50 percent from 2021. Operating loss in 2022 was $261 million, versus $665 million in 2021. 

Sabre is continuing its transition to Google Cloud, with a nearly full transition expected by the beginning of 2025. The company ended 2022 with approximately 66 percent of its total compute capacity in Google Cloud, expected to reach 90 percent by the end of this year. 

The company exited all four of the datacenters it managed in Texas. 

Development work for offloading the primary customer reservations database has been completed, and customer data migrations are on track to be completed this year. That work is in addition to the transfer work the company announced in November, including the full migration of SynXis software systems.

By the time the migration is complete, Sabre expects to have saved $150 million