What happened
Shares of Sabre (SABR -1.53%) climbed more than 16% on Thursday thanks to a new partnership with Alphabet (GOOG 0.37%) (GOOGL 0.35%) to expand the use of artificial intelligence (AI) in travel sales. Sabre's airline customers are having a good day as well, helping to boost enthusiasm about the company.
So what
Sabre is a former subsidiary of American Airlines Group that runs airline ticketing and reservation systems. The company has had a hard time of late in part because the coronavirus pandemic has gutted travel demand, but also in part because tech companies like Google have been cutting in on the ticketing business.
Image source: Getty Images.
The airlines are rallying on earnings results that indicate the industry can survive without bankruptcies. And Sabre and Google are finding ways to work together. The companies said they are developing an AI platform, known as Sabre Travel AI, aimed at helping customers get personalized content and to help travel providers boost revenue and margins. Sabre hopes to bring the product to market in early 2021.
Now what
Even after Thursday's rally, Sabre shares are down 65% for the year. There hasn't been a lot to get excited about for investors in airlines or the companies that rely on them for revenue. And with travel not expected to fully recover for years, it might be a long time before Sabre's core business returns to its pre-pandemic levels.
That said, Sabre's work on AI could be a big part of the reason the company is able to benefit once travel does return. For investors with a long-enough time horizon, the introduction of Sabre Travel AI is undoubtedly good news. In a tough year for the business, investors finally got something to get excited about on Thursday.
