Sabre ends distribution agreement with Aeroflot | Hacker News Reader

Sabre ends distribution agreement with Aeroflot

cnbc.com

114 pointspseudolus73 comments

I'm not sure why the headline doesn't include Amadeus also. They are doing the same thing. It's a much bigger deal that the "Big 2" are dropping Aeroflot distribution at the same time.

Note that Aeroflot can still sell direct on their website or call center. I don't know how many of their sales are GDS/Amadeus and GDS/Sabre versus direct, or via other smaller GDS systems.

Edit:

"The share of online and call centre sales grew by 1.5 p. p. to 36.2% in 2019 (vs 34.7% in 2018). Channel-wise, agents remain the biggest contributor to sales with 58.5%. Own sales offices accounted for 5.3% of total sales, flat year-on-year."[1]

So this is hitting that 58.5% bucket, probably most of it. Other stories say their "PSS" support is also in jeopardy, though not decided yet. If that shuts down, the airline shuts down entirely.

[1] http://ar2019.aeroflot.ru/reports/aeroflot/annual/2019/gb/En...

I think pss refers to a pricing solution suite.

It's "Passenger Service System" in this context. The core of where flights are sold. Killing off different GDS systems kills off individual sales channels. Killing off PSS kills the core of where it all lives, flights, seat inventory, pricing, etc.

Passenger service system. It's the one that handles reservations and (usually) checkin.

Would TravelSky step in? To my very limited understanding they have a very similar offering, mostly focused on the Chinese market.

Migrating a PSS is a 3-10 year project, depending on airline size

The reason the big 2 do it at the same time is also that there is a very significant payment risk for any counterparty of Aeroflot at the moment. The Ruble is falling and the Swift block is making payments even harder.

So I'm guessing that demand for Aeroflot in the GDS systems is tiny at the moment.

>So I'm guessing that demand for Aeroflot in the GDS systems is tiny at the moment.

If I understand it right, the international demand would be low, but I believe even the domestic sales typically go through travel agents that use a GDS. That is, most Aeroflot customers don't buy their tickets online. I'm sure they will find a workaround, but turning off the GDS will affect even domestic sales for a short time. The travel agencies could, of course, do the booking online, but then they don't get the commission. The workaround is probably some way to pay them commission for those kind of sales.

Aeroflot already "cancelled flights to Europe" at the same time countries closed their airspace. US and Canada also don't allow Russian flights. China has their own GDS (global distribution system = travel industry term for such a system). Maybe this will push Russia to shift to using the Chinese GDS? IIRC it's TravelSky (Hong Kong listed) but http://www.travelsky.cn/ and http://www.travelsky.net/ appear to be down right now, http://www.travelsky.com.cn/ is apparent agent login (but apparently firewalls foreign IPs), so see https://en.wikipedia.org/wiki/TravelSky

https://www.travelsky.com.cn/ works for me. It has this notice on it:

"Notice: From now on, the website URL of Xintian Youyanzhen will be changed from www.travelsky.com to www.travelsky.com.cn, and the original domain name will no longer be used."

Their online and store sales might also depend on gds system on the backend (many airlines have this kind of deal where Amadeus/Sabre take care also of inventory systems. So this might be a very big problem for them.

Yes, your direct PSS (passenger service system) or CRS (customer reservation system) could also be run by one of those two. But they aren't yet threatening to shut that down yet. So far, only the GDS bit is being turned off. There's speculation that what you're describing might happen.

Not difficult to guess that Russia's entire economy will be toast in a matter of weeks, regardless if the sanction stay how they are or become more strict. The supply chain disruption and knock-on effects must be enormous. Be it specialized software products for which there only exists a single supplier or even just x86 CPUs. (Intel/AMD don't export to Russia anymore)

It is not just Russia. Europe and the UK will suffer as well as fuel and gas prices will raise significantly (2x?) of already high levels.

We'll have to see that. For the short-medium term it will be a big pain. Europe I think can transition to some green (nuclear?) energy solutions in the next few years. Russia on the other hand -- if you exclude oil, gas, metals, there is not much left that the world buys from them.

Yes the world (not just EU, UK and the "western" world, China and India are impacted as well) would suffer in general, russia's economy will be wiped.

And the prices of oil will normalise fairly quickly when ppl stop with the panic as supply is currently not affected. It might be in the future but there are mechanisms and levers the world can use.

Raw supply is not affected but the supply chain on the finance side is, which can create artificial delivery shocks.

If Russian supply is cut how do you see prices normalize? Or you simply mean they'll be stable but high?

They will be high but there are also reserves which can be used initially. Eventually the price will stabilise as the new supply chain (without russia) matures. I think as long as the price is relatively lucrative now so that transportation is seen as a priority then the price will not go extremely high.

I think China is big enough that it can help ease the economic cost on Russia. There are a lot of natural resources, defence and research tech, that China would be glad to get in return as well.

India on the other hand has a far weaker hand as they don't have the economic muscle to challenge the Western sanctions and they are dependent on Russia for military hardware. It seems mind boggling that they are not self reliant on defence equipment, even smaller ones. They can't replace all of that hardware with stuff from West as well, as that will be too costly.

> I think China is big enough that it can help ease the economic cost on Russia

They're not going to help Russia - they're going to exploit the situation and demand deals that are barely tolerable for Russia.

> as supply is currently not affected

As far as I have kept track, not a single barrel has disappeared from the market due to sanctions until now.

How much would it cost to subsidize natural gas prices back to previous prices? Is this feasible? Would be very interested in an order of magnitude estimate.

Innocent people are dying as the result of an unprovoked war. Sanctions on Russia will inevitably have some negative economic consequences for the West - the question is, what is the total price of these consequences?

The thing with subsidies is that you just increase the price people are willing to pay for the same amount which will make the problem even worse since there is a bottleneck on the supply side.

In the case of a war, rationing is more efficient tham subsidizing of necessities. This prevents hoarding and further price runs.

>rationing is more efficient tham subsidizing

You can't ration energy in a democracy while simultaneously being staunchly opposed to the development of new energy generation infrastructure. No electorate will tolerate that.

It is as pure an example of 'you're not doing your job' as I can imagine. One of the core roles of government is to guarantee food and energy security for its populace.

I think the plan now is precisely to develop that infrastructure.

and water

Not in the near term, but I assume election wise the US will be back to full fracking and natural gas exports will resume from the US. Over $5/gallon pump prices are not a winning election strategy in the US.

I definitely don’t disagree with what you said. It reminded me of the second Democratic debate in 2007. Candidate Mike Gravel said something that stuck with me [0]

  You only see $3. Just watch those wheels turn. There's another $4, which is what we spend to keep American troops around the world to keep the price.

  So you're paying more than seven dollars a gallon; you just don't know it.

0: https://www.nytimes.com/2007/06/03/us/politics/03demsdebate_...

I'm personally happy to pay more taxes to help offset that.

Western world spent trillions of dollars to try to offset impact from the virus. It's not a bad idea to spend even few more, to stop prospects of next world war/cold war and stop a madman who openly wants to rebuilt one of the most evil empires in the history.

My mother had an energy bill that was 3x higher than before. This shit is funny when you're in the valley and you have 6000 in pocket money to burn on stuff, but in Europe that means some peoples monthly rental expenses doubled.

It's actually an existential threat for a lot of people. The German leadership just like the USA is so far detached from the normal population that they won't care, and the normal population in Germany isn't like in the middle east, so they will likely take it with some complaints.

But since you can't easily get loans like in the US in Germany I wonder what that will mean for people that can no longer afford their bills though. I've seen people being taken to jail in Germany for unpaid 20 Euro bills or not paying public transit.

They might be happy that their carbon independence finally becomes a thing and that their doomsday finally reifies. Worsening the sanctions until Russia cuts the gas is exactly aligned with their view of the world, and the worst thing that would happen would be peace.

> It's actually an existential threat for a lot of people. I am sorry but you have your priorities wrong. The existential threat to all of us is sitting in Kremlin and we must stop him now. I am in Europe, winters in my country are cold with lows to -30 celsius and our the government has been shortsighted/corrupt for decades that we depend on Russian gas for heating for full 100%. But I will support cutting off that pipeline without thinking a second even if it costs me triple or whatever, or will be installing a wood stove. I have been of the other side of the Iron curtain for good part of my life, and believe me, energy bill will be your least worry.

It’s the people unwilling to wear a little more clothes inside in order to reduce our dependence on an aggressive dictator with nuclear weapons who are out of touch, not the politicians.

Just put on more clothes and turn your heating down, easy to drastically reduce your gas bill. Most homes also have tons of low hanging fruit to improve insulation.

I know I’d be more than happy to wear an extra sweater or two in order to have Europe without wars.

Or even, use an electric blanket. Much cheaper than heating the room, much better in terms of Carbon, and sooo comfortable.

It is more complex. Fuel is heavily taxed in Europe so double price will be not double, maybe 50% increase. Still bad but not too bad. Gas (as not fuel for cars but for other means) will be different problem from country to country or even from town to town (e.g. my town might be gas independent by 2023 heating season)

Here’s a Catch-22 situation I’m facing as a result of these sanctions: My family emigrated to Canada a number of years ago, but we have an elderly relative living in Moscow with moderate dementia who we’ve been supporting remotely with live-in care.

We can’t bring them here because the dementia will be worsened by the change in environment (and the astronomical cost of health insurance until OHIP kicks in), but leaving them to live out their days in their apartment seems like it’s becoming a non-option as well, given the looming collapse of the economy and the likelihood that basic supplies won’t be available.

What’s one to do?

Sorry, I don't know. But if Russia decides to "build a wall" and limit emigration, then there might not be any choice left.

Moscow will be relatively Ok, regardless; and you dollars will buy a lot more help with the new exchange rate

If they can still transfer them!

I think it's a pretty strong assumption that they will be able to get dollars to them, or maintain good communication with their relative and/or emergency services if needed.

>What’s one to do?

All Russian population revolt on the streets against Putin and overthrow him. There will be mass casualties form the clashes with the military but sitting around under the fear of his iron fist and dying from mass poverty and shortages won't help you either.

Look what happened to Nicolae Ceaușescu and the Romanian revolution of 1989. Hundreds of people died on the streets trying to overthrow that tyrant but it happened. No dictator rules forever. The population has to be willing to sacrifice themselves for the greater good and a brighter future.

Well, go ahead then, Chuck Norris...

Bystander effect. Unless I know everyone will go together and our numbers will overwhelm "the enemy", why should I go, and maybe end up beaten up, jailed, etc, for nothing, since the state will just chug along after crushing me like an interstate bus splatting a bug on its windshield.

Yeah after a significant number of people are revolting it's easier to believe "hey this might work" and it's easier to join...

OHIP doesn't have a waiting period anymore. But travelling from Moscow to Ontario may prove difficult.

I have no idea why you are saying that. OHIP still has a waiting period of 3 months.

From https://www.ontario.ca/page/apply-ohip-and-get-health-card

"There is no longer a waiting period for OHIP coverage. If you are eligible, you will have immediate health insurance coverage. Find out if you qualify."

Book a flight via Serbia. They’re charging an arm and a leg for being a bottleneck via which you can transfer to western airlines.

Bite the bullet and expatriate them if you can handle the costs before your transport window closes [1], versus them declining destitute in their home land where you have no control if the situation deteriorates rapidly. I'd plead your case to whomever in the Canadian [2] and Russian governments will listen due to the situation and it being a compassionate case/allowance (providing elderly care close to family).

A sibling comment indicates OHIP wait periods no longer exist. Flex whatever social and consular assistance you can get, this is what they're there for. Don't be afraid to say "I need help, what can you do to help?" I'd expect more flexibility and support available during an active conflict.

EDIT: "4 independent sources I have say that the Russian border shuts down in <48, probably less than 24 hours. If you are in Russia and you can leave, leave now." -- March 3rd, 2022 9am [3]

[1] https://ru.usembassy.gov/security-alert-u-s-mission-russia/

[2] https://travel.gc.ca/destinations/russia (Consular assistance, click Assistance on horizontal nav->"Moscow" dropdown)

[3] https://buttondown.email/guzey/archive/4-independent-sources...

I can’t thank everyone in this thread so I’m replying to the top comment, but this is all amazing advice. I will see how my family will want to move forward.

Thank you very much to everybody.

I'm sorry for the dilemma but only one option seems liveable. Hope that change of environment will be handled and compensated by being closer in a safer place.

Good luck

There are options for interim health care!

https://settlement.org/ontario/health/ohip-and-health-insura...

https://www.canada.ca/en/immigration-refugees-citizenship/se...

Just wanted to add that people from Ukraine will be considered for refugee status as well: https://www.canada.ca/en/immigration-refugees-citizenship/ne...

In the short term you could have the elderly relative + a caregiver, be that family or other, live in one of the tourist areas of Mexico. It's easy access to quality healthcare and cost of renting is very reasonable.

I don't have any advice to add, I just wanted to say that I'm truly sorry this is happening to your family.

Which route will lead to fewer regrets? If you can identify it, do that one, even if it’s expensive/painful.

Seems like the environment is going to change massively one way or another.

The OHIP 3-month waiting period was suspended in 2020 due to COVID-19. They're going to restore it at some point, but for now it looks like there's no waiting period:

From https://www.ontario.ca/page/apply-ohip-and-get-health-card

"There is no longer a waiting period for OHIP coverage. If you are eligible, you will have immediate health insurance coverage. Find out if you qualify."

If this is the case, then at what point a coup/ground movement throws Putin away. A dictator can only stay as long in the power until he can keep people around him happy, even financially. There are young conscripts dying in a war in a state where many have brotherly relations with. At what point it is not just easy to turn those weapons on Putin.

At this point, but this is my personal impression since I obviously don't have any data on the matter, I guess that there are enough zombies in Russia to keep this war going until their soldiers literally starve to death.

A lot of Russians remember when their country collapsed in front of their eyes. It's probably fair to say that even Putin's harshest critics would be hesitant to go through that twice in 30 years. Not that I'm defending him by any means, just that (by design) getting rid of him will be very ugly and never easy.

Tangentially related, Mentour Pilot had some interesting takes on the future of the Russian civilian aviation industry the other day. As you'd expect, it's not a great outlook for them:

https://www.youtube.com/watch?v=yrgI4gB5W2o

It's a really recommendable channel [0]. For those who aren't aware of it, it's from a commercial airplane pilot who in his videos mostly focuses on crashes or other serious problems we may have heard of in the news and explains them in detail.

Kind of like Darknet Diaries for Aviation.

In a second channel [1] he talks about general topics related to aviation.

[0] https://www.youtube.com/c/MentourPilotaviation

[1] https://www.youtube.com/c/MentourNow

I've followed Petter on YouTube for ~3 years now and really enjoy his work. I think he does a very good job of crash analysis, really level headed, no drama and backed up by his work as an experienced pilot.

Another one I would recommend if you're into this kind of content is 74 Gear: https://www.youtube.com/channel/UCovVc-qqwYp8oqwO3Sdzx7w.

Yes, he's quite good. I like his air traffic control vs pilots videos, there's some nice details explained that you never think about.

Another thing that's going to hit them is that the leasing companies are looking to get their leased aircraft back: https://airlinegeeks.com/2022/03/02/lessors-look-to-repatria...

Things are not looking great for their airline industry.

You can add bans to fly to or over most of Europe, likely Russian-imposed restrictions or total ban on flights leaving Russia and most of the parts supply chain refusing to serve them to the list of woes.

Given the amount of flights they're currently unable to operate, losing some payment obligations to aircraft lessors may be almost be a relief.

(The Russian government has threatened to "nationalise" some aircraft in retaliation, but the problem with doing that is you get your own aircraft repossessd when they leave Russia, even if trade with Russia reverts to near-normal after the war)

Pretty sure this is also not good news for the leasing companies and the airplane manufacturers (aside from many of them making it up on increased defense spending).

The European country most exposed to this risk is certainly Ireland. According to the Irish Times newspaper, the leasing company Aercap owns 149 aircraft operated in Russia and SMBC Aviation Capital has 34 jets leased to Russian operators. [0]

AerCap is the world's largest aircraft leasing company after acquiring International Lease Finance Corporation in 2014. As of June 2020, AerCap had 1,035 owned, managed aircraft in its portfolio. [1]

That's 14% of their business that got nuked.

0. https://airlinegeeks.com/2022/03/02/lessors-look-to-repatria...

1. https://en.wikipedia.org/wiki/AerCap

Would other airlines want to lease these aircraft, or will the lessors be left holding the bag?

Not surprised, their printers catch on fire quite easily

Dang, beat me to it. =D

For a second I thought it was about hummus served on Aeroflot flights but quickly realized the confusion of Sabra with Sabre.

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