American Says Talks Held on Sabre Network : Airlines May Buy Stakes in Reservations System

American Airlines is talking with two smaller U.S. airlines and a European airline consortium about selling them stakes in its highly sophisticated computer reservation system.

American is negotiating with Alaska Airlines, Southwest Airlines and Amadeus, a reservation system owned by four European airlines, spokesmen for the airlines said. American said it may sell up to half of its Sabre reservation network for about $750 million.

The development follows the collapse six weeks ago of a proposed merger between Sabre and Datas II, Delta Air Line’s computer reservation system. The Justice Department objected to the merger, saying the creation of a big network would restrict competition and result in higher fares and poorer service for passengers.

When the merger fell apart, American said it planned to sell a stake in Sabre to other airlines, which it refused to identify. American spokesman John Hotard said the airline expects to conclude negotiations for a sale sometime this fall.

Competitive Benefits

American’s reservation network is the most widely used in the United States, with about 35% of the market. It can be used not only to buy airline seats but also to reserve hotel rooms and rental cars.

Alaska Airlines and Southwest Airlines have no reservation systems of their own, a situation that puts them at a competitive disadvantage. Alaska pays a fee to American to be included in its reservation system so that travel agents can reserve seats electronically. The cost to Alaska Airlines is around $1.50 for each ticket, which can total millions of dollars a year.

Southwest does not participate in any computer system. This means that if a travel agent wants to sell a Southwest ticket, the agent must call Southwest to confirm the reservation, a cumbersome process that many agents prefer to avoid.

A stake in Sabre “would be nice for us,” said Southwest spokesman David Brown. “It would afford us the opportunity to be listed on a system without tens of millions in expense.”

The up-front cost is hefty. American is asking for around $15 million for each percentage point of ownership in the system--a price tag that some smaller airlines might find exorbitant.

Braniff Inc., based in Orlando, Fla., decided against buying an interest in Sabre. “We’re a small airline,” Braniff spokesman Don McGuire said. “It makes more sense for us to put our resources elsewhere.”

American spokesman Hotard said the airline is in talks with Madrid-based Amadeus, which is owned by Air France, Iberia Airlines of Spain, Lufthansa German Airlines and Scandinavian Airlines System. With its eight associate airline members, the Amadeus group controls 60% of the scheduled traffic between European countries.