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El Al is to sell its stake in Sabre Holdings.  The move is part of the compromise agreement intended to cancel the law suit filed by Sabre Holdings against El Al on the grounds of breach of agreement between the partners.

El Al and Sabre Holdings have reached a settlement whereby Sabre Holdings will purchase El Al’s 49 percent share of Sabre Israel Technologies. As part of the agreement, for an undisclosed sum, El Al will provide Sabre Israel Technologies with information regarding prices and last minute reservations.

Last year Sabre Holdings filed an arbitration claim as well as a claim totaling $36 million against El Al as a result of breach of agreement when El Al switched to the Amadeus reservations system. Sabre also demanded $67 million in damage to their reputation for breaching exclusivity in marketing the distribution system.

According to the agreement, the companies began legal proceedings in the International Chamber of Commerce's International Court of Arbitration in London; however there was a failure to reach a compromise. As a result, David Maimon, Vice President of Customer Service for El Al became involved in the discussions. According to elements concerned discussions then progressed significantly and El Al won over the trust of the representatives of Sabre Holdings.

In a statement from El Al, Maimon said that despite the end of the agreement, a new commercial cooperation has begun that will contribute to the relations between Sabre and El Al and will work to the benefit of the travel agents community in Israel. In an announcement from El Al to the stock exchange it was announced that Sabre Israel Technologies will repay the loan to the owners given by El Al, with a balance of $1.2 million.  The shareholders equity of Sabre Israel Technologies up to the 30th June 2009 totaled $2.6 million.

It was also reported that as a result of the deal El Al expects to report a pre-tax capital gain of $1.7 million in its financial statement for the third quarter of 2009.

Guy Cohen, CEO of Sabre Israel Technologies, who is expected to continue in his role but under new owners, said that Sabre Israel Technologies will continue to exist and will maintain its close relationship with El Al and will benefit from the excellent opportunity to accelerate its growth in the Israeli market.

Sabre Israel Technologies was formed as a joint project between Sabre Holdings and El Al in 2001, with the aim of offering products and solutions to travel agents in Israel.