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Air Berlin will not migrate to Sabre
Sabre have filed a document to indicate they will be recording a charge of between USD 80 million and 100 million less sums due from Air Berlin in their accounts. Generally PSS providers capitalise the costs associated with implementation and set up of new customers and then amortise this amount over the term of the agreement according to their accepted accounting principles. The amount Sabre have quoted seems very high for a carrier the size of Air Berlin. T2RL conclude that there must have been considerable customisation of the solution combined with implementation services delivered over an unusually long period of time for the amount to be so high. It is also clear from the filing that there is a termination fee in the PSS contract and that Sabre expect to get this fee. Given Air Berlin are not moving to Sabre it is very likely that they remain on Amadeus and other custom developed solutions for the forseeable future.
Published: 25/05/2017




Source: http://investors.sabre.com/secfiling.cfm?filingID=1597033-17-119&CIK=1597033 Sabre 8K Filing 24 May 2017 Item 2.06 Material Impairments

On May 24, 2017, Sabre Corporation (“Sabre”) concluded that, as required by U.S. generally accepted accounting principles, it expects to record a charge of approximately $80 million to $100 million, before taxes, for impairment of Sabre’s previously capitalized net costs and other assets, net of expected estimated recoverable fees and deferred revenue, associated with its contract with Air Berlin Plc & Co Luftverkehrs KG (“Air Berlin”). This impairment charge represents a non-cash expense in the second quarter of 2017. Sabre has notified Air Berlin that, given the substantial amount of uncertainty of reaching an agreement regarding the implementation of SaaS services pursuant to the contract, Sabre is commencing a formal resolution process, resulting in the charge. The contract provides for recoverability of at least a portion of capitalized net costs, which has been considered in the impairment assessment. Further, Sabre believes that its rights under the contract would entitle it to a termination fee that is substantially higher than the amount of this impairment charge. The impairment charge will result in a material impact on Sabre’s financial results, and related matters are expected to further adversely impact Sabre's future results of operations and cash flow.

Forward-Looking Statements

Any statements herein regarding Sabre that are not historical or current facts are forward-looking statements. These forward-looking statements convey Sabre’s current expectations or forecasts of future events. Forward-looking statements regarding Sabre involve known and unknown risks, uncertainties and other factors that may cause Sabre’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Note Regarding Forward-Looking Statements” sections of Sabre’s quarterly report on Form 10-Q for the period ended March 31, 2017, its annual report on Form 10-K for the year ended December 31, 2016, and any of Sabre’s other applicable filings with the Securities and Exchange Commission. Unless required by law, Sabre undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof.



 
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