SABRE - THE DEVELOPMENT OF INFORMATION-BASED COMPETENCE AND EXECUTION OF INFORMATION-BASED COMPETITION

This article describes the evolution of reservations processing at American Airlines, which became critical in the 1950s as passenger volumes threatened to overwhelm electromechanical and manual filing methods. American Airlines' Advanced Process Research Department sought technical solutions for determining the availability of space on planes, adjusting the inventory of seats, and recording passenger information. Conventional data processing equipment offered scant help, and equipment vendors were not interested in the application until the mid-1940s when the Teleregister Corporation agreed to build a system based on American's model. The resulting ''Reservisor'' system was only a partialsolution. In the late 1950s, IBM teamed with American Airlines to devise a teleprocessing solution - Sabre. When fully implemented, Sabre established a dominant design for reservations processing that was copied throughout the airline industry. Functional enhancements transformed Sabre from a reservations system into a passenger services system that supported many additional aspects of airline operations. Widespread access to Sabre for travel agents coincided with regulatory reform that was redefining competition in the industry. Sabre was transformed again into a sales distribution system, American's management exploited Sabre's latent economies of scale and scope to survive, and ultimately thrive, in a deregulated environment.