GDS implications of US Air's bid for Delta

Implications: Yesterday's hostile bid by USAir for Delta has significant implications on the GDS business. 

Today USAir uses the Sabre system as it's inventory and operational system.  Delta has its own system, Deltamatic, which is hosted and operated by Worldspan. 

Should USAir succeed in its bid for Delta, Worldspan will lose yet another customer, as USAir has stated its intention to migrate the reservations system to a single environment (which would no doubt be Sabre).


Analysis: Delta is the last holdout of the US Majors to operate on their own, homegrown reservations system environment.  Known as Deltamatic, the operation of this system was outsourced to Worldspan in 1995.  At the time, Delta was one of three owner/founders of Worldspan.

In 1998, Sabre Airline Solutions completed the largest system migration in the airline industry's history when 200 US Airways systems were shut down and shifted to Sabre systems.  With the investment in time and money made in their implementation of Sabre, it is highly unlikely that Deltamatic would be the surviving system.

The migration would likely occur in the 1st quarter of 2007.  The revenue basis used for the hosting systems is on a per passenger basis, so Sabre would likely see an increase it revenues in 2Q07 as a result.  Just over 9% of Sabre's revenues come from airline hosting.

SITA Gabriel has the largest number of hosted carriers at just over 170, but they represent just 4% of total passengers boarded globally.  Sabre is next at 71, with 14% of the total passengers boarded globally. Amadeus affiliates host over 120 carriers that use AlteaRes as the front end, representing 15% of all passengers boarded.  32 of those use Amadeus’ new inventory system.  Open Skies has 25 customers, Shares 19 (7% of passengers globally) and Worldspan 15 (4% of all passengers boarded globally).   Figures aren’t available for Open Skies.


Worldspan is privately held.  Sabre trades as TSG.