Sabre Corporation ( SABR Quick Quote SABR - Free Report) recently announced that a Thai-based premium-oriented airline, Nok Air, has entered two long-term strategic agreements with the company to support its evolution of a new business strategy.
Per the contract, Nok Air has entered into one agreement with Sabre and the other with its subsidiary, Radixx, to enhance revenue growth opportunities, expand international presence and develop new airline partnerships.
Utilizing Sabre’s Global Distribution System (GDS) platform, the Bangkok-headquartered air carrier intends to distribute its flights and services to travel agencies in Thailand through the travel tech company’s global travel marketplace. This, in turn, will aid Nok Air in expanding its home market and foraying into new international markets.
Radixx will provide Nok Air its fully integrated Passenger Service System (“PSS”), Radixx Res, for reservations, inventory, pricing, e-commerce, agency distribution, departure control, load control, loyalty and other related technical capabilities.
Both the agreements will not only broaden Nok Air’s global operations but also accelerate the recovery of the tourism industry post-pandemic. It will also offer new and improved personalized experiences to the carrier’s customer base of premium travelers and value-based customer segments.
The agreements are likely to aid Sabre in expanding its customer share and driving its Travel Solutions segment revenues. The company’s transactions related to GDS, which works like a marketplace connecting travel suppliers with buyers, are likely to see an increase.
Sabre has its customer base spread over 160 nations with more than 425,000 agency partners globally. It is one of the largest marketplaces in the world that manages approximately $260 billion worth of global travel spending annually.
With a rise in vaccinated travelling and the lifting of restrictions worldwide, Sabre is well-poised to capitalize on the travel industry's improving market scenario. The company’s Travel Solutions segment revenues totaled $390 million in the third quarter compared with $237 million in the year-ago quarter.
Sabre has been winning consecutive deals from major global airlines, hoteliers and travel agencies of late. Recently, in December, it signed a partnership with Gran Colombia de Aviación (GCA Airlines) to power the carrier’s future revenue growth while reaching new market segments.
In the same month, it entered a long-term, multi-faceted strategic partnership with American Express Global Business Travel focused on developing technologies that will enable the future of corporate travel distribution.
In November, it inked a long-term partnership with the Hanover, Germany-based TUI Group to globally distribute the latter’s own hotel brands, including TUI Blue, Robinson and TUI Magic Life. Prior to that, it entered a distribution partnership with Calafia Airlines to enable the distribution of flights and services to travel agencies in the United States through its travel marketplace, thus helping the airline accelerate revenue growth and expand its market reach.
Earlier in November, it partnered with Japan-based Hotel Keihan Chain to create tourism opportunities in the country. Separately, it entered a distribution agreement with the second-largest hotel group in China, Huazhu Group, to expand global reach for its upscale and luxury hotel brands and support the latter’s global growth strategy.
However, it is worth mentioning that Sabre refrained from issuing an outlook citing uncertainty about the impact of the pandemic on its financials recently. During the fourth quarter, the company usually suffers from seasonality in the travel industry. Revenues from travel bookings decline massively during the quarter, especially in December, as holiday-related bookings are done in the earlier part of the year. Business travels decline during the month, hence overall revenues fall.
Zacks Rank & Stocks to Consider
Sabre currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are
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