Author Question: What was the reasoning behind SABRE's purchase of Travelocity in 1996? What will be an ideal response? (Read 14 times)

jayhills49 · **on:** Sep 11, 2019

Question 1

What main factor distinguishes older airlines from newer airlines?

What will be an ideal response?

Question 2

What was the reasoning behind SABRE's purchase of Travelocity in 1996?

What will be an ideal response?

chinwesucks · **Reply #1 on:** Sep 11, 2019

Answer 1

Fewer unions on the labor side and lower unit operating costs.

Answer 2

This was a vertical merger meaning that Travelocity would have been using the GDSs to obtain inventory. By acquiring the agency, SABRE guaranteed that Travelocity would be working through SABRE alone. Also, SABRE gained access to the area between buyers and suppliers where, before, it was only selling inventory to the agencies.