2nd-Quarter Results Buoy Our View on Sabre

Our view offered over the past several months--that

Network air bookings increased 7% in the quarter, above the industry's growth of 4.7% and Amadeus' 2.9% rise, driven by Sabre's Flight Centre and other wins over the past year, supporting our stance on its solid competitive product offering. While it's not surprising that Sabre's Asia-Pacific network bookings grew 23.5% (versus 29% for Amadeus) due to the Flight Centre win last year, it is encouraging that North American volume rose 5% (versus 6.5% for Amadeus), as the company held its own despite peers' competitive efforts to enter the region. Segment sales per booking grew to $5.11 from $4.86, further evidence that Sabre's technology offering is gaining traction with the new executives hired in the past two years.

Airline Solutions' organic sales and passengers boarded grew 8% and 9.8%, respectively, representing an acceleration from the mid-single-digit lift witnessed in recent quarters, offering more credence to Sabre's competitive positioning. Hospitality grew 10.4% as Sabre completed the implementation of Wyndham on its cloud-based reservation management system. This came in ahead of Amadeus, which is in the process of onboarding its first enterprise customer, InterContinental, to its system (scheduled to be complete by year-end 2018 or early 2019).

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