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

This article describes the evolution of reservations processing at Ame rican Airlines, which became critical in the 1950s as passenger volume s threatened to overwhelm electromechanical and manual filing methods. American Airlines' Advanced Process Research Department sought techni cal solutions for determining the availability of space on planes, adj usting the inventory of seats, and recording passenger information. Co nventional data processing equipment offered scant help, and equipment vendors were not interested in the application until the mid-1940s wh en the Teleregister Corporation agreed to build a system based on Amer ican's model. The resulting ''Reservisor'' system was only a partialso lution. In the late 1950s, IBM teamed with American Airlines to devise a teleprocessing solution - Sabre. When fully implemented, Sabre esta blished a dominant design for reservations processing that was copied throughout the airline industry. Functional enhancements transformed S abre from a reservations system into a passenger services system that supported many additional aspects of airline operations. Widespread ac cess to Sabre for travel agents coincided with regulatory reform that was redefining competition in the industry. Sabre was transformed agai n into a sales distribution system, American's management exploited Sa bre's latent economies of scale and scope to survive, and ultimately t hrive, in a deregulated environment.