SOUTH LAKE, Texas - A rapid decline in airline and hotel bookings has led Sabre to post a major fall in revenues for the first quarter of 2020.
The outbreak of the coronavirus has hit the travel technology and distribution company across all its metrics, with revenue down from US$1.05 billion in the first quarter of 2019 to $659 million in the corresponding three-month period in 2020.
The impact on Sabre's earnings will be seen as a bellwether (as it will for competitor Amadeus in a few weeks) as to how far-reaching COVID-19 has been on booking volumes across multiple sectors flowing through the distribution systems of the industry.
Sabre posted a loss of U$213 million in the first three months of 2020, flipping from a $57 million profit in Q1 2019.
The hardest hit area of the business is the core global distribution system, with revenue down by 45% year-over-year to US$428 million.
Airline Solutions fell by 16% to $80 million and the hospitality division by 19% to $59 million.
CEO Sean Menke says, "This is an unprecedented time of disruption in global travel. The COVID-19 pandemic represents a massive challenge to the travel industry.
"We are a global leader in the retailing, distribution and fulfillment of travel and a mission-critical solutions provider to the global travel industry.
"We've experienced a rapid decline in airline and hotel bookings, exacerbated by significant cancellations. The environment remains uncertain, with reductions in airline capacity and a volatile macro environment."
The company announced an initial US $200 million cost-cutting plan in March. A further $125 million in savings will be made through 2020 and additional cuts have not been ruled out, it says.
Some 85% of the company's revenue is tied directly to transaction volumes. New bookings fell by 70% year-over-year in March, it says.
The company adds that it has more than 18 months of liquidity available at a zero booking rate.
Sabre's recently axed plan to buy airline distribution platform Farelogix (after a UK regulator ruled against the deal) has cost the company some $46 million through a combination of fees and a breakup charge.