American Turns to HP Over SABRE For Next Reservation System

(MoneyWatch)  It truly is the end of an era when American walks away from one of its greatest inventions. That is exactly what just happened as the airline has opted to have HP develop its next reservations system.

For those in need of a little history lesson, American first put SABRE into use in 1960. By the mid 1970's, under Bob Crandall's leadership, it had gone into travel agencies, dramatically impacting market share. By the 1980's, an inventory management system came out making it even more powerful and effectively putting the final bullet into low cost startup PeoplExpress. I highly recommend reading Hard Landing by Thomas Petzinger Jr for a truly thrilling read on this epic.

But now, the party is over. American will create a new Passenger Service System with HP called Jetstream. This will handle reservations, pricing, ticketing, inventory, and airport functions among others. There will still be SABRE products on the property at American, but the heart of the airline is going elsewhere with the hope that HP can create a true leap forward to help them get an edge and get away from the inflexible systems that plague airlines today. But how was SABRE beaten out? It's been coming for a long time.

The separation started in 1996 when American's parent, AMR, took SABRE out from underneath the airline and put it into a separate division. They also sold 18 percent of the shares of the technology provider. At the end of 1999, AMR decided to spin SABRE off completely and distribute the shares to holders of AMR's stock.

In 2001, SABRE entered into an agreement to give most of its infrastructure business over to EDS. That partnership has been strengthened in recent years, so effectively SABRE wasn't handling the existing system anyway.

So this is just another step in something that has been coming for quite awhile. Even so, it's still surprising to actually see it happen.