<PAGE> 1
                           UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                      
                             FORM 10-Q
[] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30,
1998.


[  ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the Transition Period From
to    .


Commission file number 1-12175.



                   The SABRE Group Holdings, Inc.
       (Exact name of registrant as specified in its charter)

 <TABLE>
<S>                                                <C>
          Delaware                                75-2662240
(State or other jurisdiction                (I.R.S. Employer
 of incorporation or organization)          Identification No.)
        

   4255 Amon Carter Blvd.
      Fort Worth, Texas                             76155
    (Address of principal                        (Zip Code)
     executive offices)
</TABLE>
Registrant's telephone number, including area code (817) 963-6400


                     Not Applicable
(Former name, former address and former fiscal year, if changed since
 last report)
                            
                            
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past
90 days.  Yes X          No ___.




Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.


Class A Common Stock, $.01 par value -  22,415,800 as of November 11, 1998

Class B Common Stock, $.01 par value - 107,374,000 as of November 11, 1998
<PAGE> 2
                         INDEX
                           
            THE SABRE GROUP HOLDINGS, INC.
                           
                           
                           
                           
PART I:   FINANCIAL INFORMATION


Item 1.  Financial Statements

Consolidated  Balance Sheets - September 30, 1998 and December 31, 1997
 
Consolidated  Statements of Income -- Three and nine months
  ended September 30, 1998 and 1997

Condensed Consolidated Statement of Stockholders'Equity -- Nine months ended
 September 30, 1998

Consolidated Statements of Cash Flows -- Nine months ended
  September 30, 1998 and 1997

Notes to Consolidated Financial Statements

Item   2.   Management's Discussion and Analysis of Financial Condition
 and Results of Operations


PART II:  OTHER INFORMATION


Item 1.  Legal Proceedings

Item 4.  Submission of Matters to a Vote of Security Holders

Item 6.  Exhibits and Reports on Form 8-K


SIGNATURE




<PAGE> 3
                     PART I:  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
THE SABRE GROUP HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>

                               September 30,       December 31,
                                   1998              1997
                                (Unaudited)
<S>                                 <C>              <C>
ASSETS
CURRENT ASSETS
  Cash                        $  5,894           $    11,286
  Short-term investments       454,140               573,620
 Accounts receivable, net      354,663               239,626
 Receivable from affiliates     34,019                10,829
 Prepaid expenses               14,711                17,708
 Deferred income taxes          29,631                21,093
    Total current assets       893,058               874,162

PROPERTY AND EQUIPMENT
  Buildings  and  leasehold
   improvements                327,651               321,987
  Furniture, fixtures and 
   equipment                    39,429                36,904
  Service contract equipment   549,533               548,706
  Computer equipment           508,692               395,887
                             1,425,305             1,303,484
 Less accumulated depreciation
  and amortization            (758,991)             (721,917)
 Total property and equipment  666,314               581,567

Investments in joint ventures  146,547                 8,198
Computer software, net          87,454                41,386
Other assets, net               86,607                18,645
TOTAL ASSETS                $1,879,980         $   1,523,958

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Accounts payable             $144,696           $    96,041
 Accrued compensation and
  related benefits              78,268                69,694
 Other accrued liabilities     196,563               150,785
  Total current liabilities    419,527               316,520

Deferred income taxes           10,799                12,354
Pensions and other             
 postretirment benefits         98,923                89,573
Other liabilities              103,295                30,350
Debenture payable to AMR       317,873               317,873
Commitments and contingencies

STOCKHOLDERS' EQUITY
 Preferred  stock:   $0.01
  par value; 20,000 shares
  authorized; no shares issued     ---                   ---
 Common stock:
  Class A: $0.01 par value;
  250,000 shares authorized;
  23,692 and 23,480 shares
  issued, respectively             237                   235
  Class B; $0.01 par value;
  107,374 shares authorized;
  107,374 shares issued and
  outstanding                    1,074                  1,074
 Additional paid-in capital    599,426                593,939
 Retained earnings             376,310                164,004
 Less treasury stock at cost;
  1,387 and 72 shares,
  respectively                 (47,484)                (1,964)
   Total stockholders'equity   929,563                757,288
TOTAL LIABILITIES AND 
 STOCKHOLDERS' EQUITY       $1,879,980         $    1,523,958

</TABLE>
The accompanying notes are an integral part of these financial
statements.

 <PAGE> 4
THE SABRE GROUP HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (In thousands, except per share amounts)
<TABLE>
<CAPTION>


                          Three Months Ended     Nine Months Ended
                            September 30,          September 30,
                           1998        1997        1998      1997
<S>                         <C>         <C>         <C>        <C>
REVENUES
 Electronic Travel
  Distribution           $339,695    $308,136  $1,023,237  $927,772
 Information Technology
  Solutions               264,620     149,292     711,751   418,880
    Total revenues        604,315     457,428   1,734,988 1,346,652

OPERATING EXPENSES
  Cost of revenues
   Electronic Travel
    Distribution          233,976     214,119     682,298   619,097
   Information Technology
    Solutions             226,227     112,132     592,255   317,653
  Selling, general and  
   administrative          45,667      41,709     138,272   117,330
   Total operating
    expenses              505,870     367,960   1,412,825 1,054,080
 OPERATING INCOME          98,445      89,468     322,163   292,572

OTHER INCOME (EXPENSE)
  Interest income           6,442       8,617      18,772    21,784
  Interest expense         (5,087)     (5,713)    (14,684)  (16,753)
  Other, net               13,707        (509)     13,898      (459)
                           15,062       2,395      17,986     4,572
 INCOME BEFORE PROVISION
  FOR INCOME TAXES        113,507      91,863     340,149   297,144
 Provision for income
  taxes                    42,083      35,664     128,414   115,724
NET EARNINGS            $  71,424   $  56,199  $  211,735 $ 181,420


EARNINGS PER COMMON SHARE
  Basic                  $   .55     $   .43   $  1.63    $   1.39
  Diluted                $   .55     $   .43   $  1.62    $   1.39 
NUMBER OF SHARES USED
IN COMPUTATION
  Basic                  129,731       130,659    130,052   130,640
  Diluted                130,084       131,149    130,579   130,979
 </TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE> 5
THE SABRE GROUP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited) (In thousands)
<TABLE>
<CAPTION>
                        Class A  Class B   Additional Retained  Treasury
                         Common   Common    Paid-in    Earnings  Stock
                          Stock    Stock     Capital    
<S>                        <C>      <C>       <C>       <C>        <C>
BALANCE AT DECEMBER
31, 1997                 $  235    $ 1,074  $ 593,939 $ 164,004  $ (1,964)
Net earnings                ---       ---       ---     211,735      ---
Issuance of Class A
 Common Stock pursuant
 to stock option, restricted
 stock incentive, and stock
 purchase plans               2       ---       3,485      ---      3,801
Tax benefit from exercise
 of employee stock options  ---       ---       2,002      ---       ---
Repurchase of Company stock ---       ---       ---        ---    (49,321)
Unrealized gain on
 investments, net of 
 deferred taxes             ---       ---       ---        571       ---

BALANCE AT SEPTEMBER
 30, 1998                 $ 237    $ 1,074   $ 599,426 $376,310  $(47,484)

</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE> 6
THE SABRE GROUP HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In
thousands)
<TABLE>
<CAPTION>

                                     Nine Months Ended September 30,
                                       1998           1997
<S>                                  <C>            <C>
OPERATING ACTIVITIES
Net earnings                         $211,735       $ 181,420
 Adjustments to reconcile net
  earnings to cash provided by
  operating activities
  Depreciation and amortization       184,712          135,954
  Deferred income taxes                (8,442)           2,253
  Other                                 3,661           (2,046)
  Changes in operating assets and
   liabilities
    Accounts receivable              (117,058)        (44,164)
    Prepaid expenses                    1,163          (1,587)
    Other assets                        1,425           1,637
    Accrued compensation and
     related benefits                   8,574           6,988
    Accounts payable and other      
     accrued liabilities               73,586          45,563
    Receivable from and payable to 
     affiliates                       (23,190)        (49,662)
    Pensions and other postretirement
     benefits                           9,350          15,033
    Other liabilities                     525          (1,221)
     Cash provided by operating 
      activities                      346,041         290,168

INVESTING ACTIVITIES
  Additions to property and
   equipment                         (259,974)       (170,630)
  Net decrease (increase) in short-
   term investments                   120,257        (109,640)
  Net investment in joint ventures   (135,570)            134
  Other investing activities, net     (35,209)        (21,194)
  Proceeds from sale of equipment       1,248           3,616
  Cash used for investing activities (309,248)       (297,714)

FINANCING ACTIVITIES
  Proceeds from issuance of common
   stock                                1,055             506
  Proceeds from exercise of stock
   options                              6,081             574
  Purchases of treasury stock         (49,321)            ---
   Cash provided by (used for)
    financing activities              (42,185)          1,080

Decrease in cash                       (5,392)         (6,466)
Cash at beginning of the period        11,286          15,992
CASH AT END OF THE PERIOD             $ 5,894        $  9,526

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.   GENERAL INFORMATION

The SABRE Group Holdings, Inc. is a holding company. Its sole direct
subsidiary is The SABRE Group, Inc., which is the successor to the businesses
of The SABRE Group which were previously operated as subsidiaries or
divisions of American Airlines, Inc. ("American") or AMR Corporation ("AMR").
The SABRE Group was formed by AMR to capitalize on synergies of combining AMR's
information technology businesses under common management. Unless otherwise
indicated, references herein to the "Company" include The SABRE Group Holdings,
Inc. and its consolidated subsidiaries.
  
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 BASIS OF PRESENTATION - The accompanying unaudited consolidated financial
 statements have been prepared in accordance with generally accepted
 accounting principles for interim financial information and with the
 instructions to Form 10-Q and Article 10 of the Securities and Exchange
 Commission's Regulation S-X.  Accordingly, they do not include all of the
 information and footnotes required by generally accepted accounting
 principles for complete financial statements.  In the opinion of
 management, these financial statements contain all adjustments, consisting
 of normal recurring accruals, necessary to present fairly the
 financial position, results of operations and cash flows for the periods
 indicated. The preparation of financial statements in accordance
 with generally accepted accounting principles requires management to make
 estimates and assumptions that affect the amounts reported in
 the financial statements and accompanying notes.  Actual results may differ
 from these estimates. The Company's quarterly financial data should be
 read in conjunction with the consolidated financial statements of the Company
 for the year ended December 31, 1997 (including the notes thereto), set forth
 in The SABRE Group Holdings, Inc. Annual Report on Form 10-K.
  
 EARNINGS PER COMMON SHARE -  Basic earnings per share excludes any dilutive
 effect of options, warrants and convertible securities.  The number of shares
 used in the diluted earnings per share calculations includes the dilutive
 effect of stock options, restricted and  career equity shares.  The net
 earnings used in the diluted earnings per share calculations have been
 adjusted for the incremental amortization expense that would have been
 recognized had options issued to US Airways, Inc. ("US Airways") qualified
 as equity instruments for accounting purposes during the period.

 RECLASSIFICATIONS -  Certain reclassifications have been made to the 1997
 financial statements to conform to the 1998 presentation.

3.  COMPREHENSIVE INCOME

 As of January 1, 1998, the Company adopted Financial Accounting Standards
 Board Statement No. 130, Reporting Comprehensive Income.  Statement 130
 establishes rules for the reporting and display of comprehensive
 income and its components.  For the three and nine months ended September
 30, 1998 and 1997, the differences between net earnings and total
 comprehensive income were not material.

<PAGE> 8
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

4.   EARNINGS PER SHARE

  The  following  table sets forth the computation  of  basic  and diluted
  earnings per common share (in thousands, except per share amounts):
  <TABLE>
  <CAPTION>
                           Three months ended     Nine months ended
                              September 30,         September 30,
                              1998       1997       1998       1997
   <S>                         <C>        <C>        <C>        <C>
   Numerator:
    Numerator for earnings
     per common share, basic-
     net earnings             $71,424    $56,199    $211,735   $181,420
    Incremental amortization
     of deferred asset 
     related to options issued
     to US Airways               (254)       ---        (254)      ---
    Numerator for earnings per
     common share, diluted-
     adjusted net earnings    $71,170     $56,199   $211,481   $181,420

   Denominator:
    Denominator for earnings
     per common share, basic-
     weighted-average shares  129,731     130,659    130,052    130,640
    Dilutive effect of stock
     awards and options           353         490        527        339
    Denominator for earnings
     per common share, diluted-
     adjusted weighted-average
     shares                   130,084     131,149    130,579    130,979

   Earnings per common
    share, basic              $   .55    $   .43   $   1.63     $  1.39
   Earnings per common 
    share, diluted            $   .55    $   .43   $   1.62     $  1.39

  </TABLE>
5. SIGNIFICANT TRANSACTIONS

   In January 1998, the Company completed the execution of a 25-year
   information technology services agreement with US Airways. Under the
   terms of the agreement, the Company will provide substantially all of US
   Airways' information technology services.  Additionally, the Company
   agreed to assist US Airways in making its information systems Year 2000
   compliant.  In connection with the agreement, the Company purchased
   substantially all of US Airways'information technology assets for
   approximately $47 million, hired more than 600 former employees of US
   Airways, and granted to US Airways two tranches of stock options, each
   to acquire 3 million shares of the Company's Class A Common Stock. 
   During certain periods, US Airways may select an alternative
   vehicle of substantially equivalent value in place of receiving stock.
   The first tranche of options is  exercisable during the six month period
   ending two years after the transfer of US Airways' information
   technology assets, has an exercise price of $27 per share and is subject
   to a cap on share price of $90.  The second tranche of options is
   exercisable during the ten year period beginning on the fifth
   anniversary of the asset transfer date, has an exercise price of $27 per
   share, and is subject to a cap on share price of $127. The Company has
   recorded a long-term liability and a related deferred asset
   equal to the number of options outstanding multiplied by the difference
   between the exercise price of the options and the market price of the
   Company's Class A Common Stock.  The asset and liability are adjusted for
   changes in the market price of the Company's stock at each month-end.  The
   deferred asset is being amortized over the eleven- year noncancelable
   portion of the agreement.
<PAGE> 9
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

  In February 1998, the Company signed long-term agreements with ABACUS
  International Holdings Ltd.  which created a Singapore-based joint venture
  company, called ABACUS International Ltd.("ABACUS"), to manage travel
  distribution in the   Asia-Pacific region.  The Company received 35
  percent of the shares of the joint venture company and accounts for
  its investment under the equity method.  The Company paid $139 million
  in cash and contributed its assets related to the Company's ongoing
  travel distribution activities in Asia- Pacific and other consideration.
  The Company provides ABACUS with transaction processing on the SABRE
  computer reservations system.
  
6.   LEGAL PROCEEDINGS

  In August 1998, the Company received a favorable court                      
  judgment regarding legal proceedings previously discussed in
  the Company's Annual Report on Form 10-K.  The
  proceedings related to Ticketnet Corporation, an
  inactive subsidiary of the Company. As a result, the
  Company recognized, in the third quarter,
  approximately $14 million of other income related to
  the judgment.
<PAGE> 10
ITEM   2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE SABRE GROUP HOLDINGS, INC.
RESULTS OF OPERATIONS

SUMMARY   The Company generates its revenue from
providing electronic travel distribution services and
information technology solutions services.  During the
nine months ended September 30, 1998, the Company
generated approximately 59.0% of its revenue from
electronic travel distribution services and
approximately 41.0% of its revenue from information
technology solution services.  The following table
sets forth revenues by affiliation and geographic
location as a percent of total revenues:
<TABLE>
<CAPTION>


                   Three months ended       Nine months ended ended
                      September 30,             September 30,
                      1998       1997       1998         1997
 <S>                  <C>        <C>        <C>         <C>
   Affiliation:
   Unaffiliated
    Customers       75.9%       70.9%        74.4%       70.6%
   Affiliated
   Customers        24.1        29.1         25.6        29.4
    Total          100.0%      100.0%       100.0%      100.0%

   Geographical:
    United States   82.7%       80.8%        81.9%       81.1%
    International   17.3        19.2         18.1        18.9
     Total         100.0%      100.0%       100.0%      100.0%
</TABLE>
The Company's operating margins were 18.6% and 21.7% for the nine months
ended September 30, 1998 and 1997, respectively.  Gross margins for
electronic travel distribution services and information technology
solutions were 33.3% and 16.8%, respectively, for the nine months ended
September 30, 1998, and 33.3% and 24.2%, respectively, for the nine months
ended September 30, 1997.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

ELECTRONIC TRAVEL DISTRIBUTION. Electronic travel distribution revenues
for the three months ended September 30, 1998 increased approximately $32
million, 10.4%, compared to the three months ended September 30, 1997,
from $308 million to $340 million. The increase was primarily due to
growth in booking fees from associates from $277 million to $303
million.  This growth was primarily driven by an overall increase in
the price per booking charged to associates.  Other revenues increased
$6 million primarily due to the Company's joint ventures and
sales of miscellaneous products and services.

Cost of revenues for electronic travel distribution increased approximately
$20 million, 9.3%, from $214 million to $234 million. This increase was
primarily attributable to increases in subscriber incentives, depreciation
and amortization, salaries and benefits and other operating expenses.
Subscriber incentive expenses increased in order to maintain and expand the
Company's travel agency subscriber base.  Depreciation and amortization
expense increased primarily due to shorter depreciable lives on purchased
subscriber equipment reflecting increased technological changes
and an increase in capitalized software and other long term assets.
Salaries and benefits increased primarily due to annual salary increases.
Other operating expenses increased primarily due to equipment maintenance costs
and other software development expenses related to the Company's Year 2000
compliance program.

INFORMATION TECHNOLOGY SOLUTIONS.  Revenues from information technology
solutions for the three months ended September 30, 1998 increased
approximately $116 million, 77.9%, compared to the three months ended
September 30, 1997, from $149 million to $265 million. Revenues from
unaffiliated customers increased approximately $109 million, primarily
related to services performed under the information technology
services agreement with US Airways.  Revenues from affiliated customers
increased approximately $7 million, primarily related to Year 2000 services
performed for AMR.
<PAGE> 11
THE SABRE GROUP HOLDINGS, INC.
RESULTS OF OPERATIONS
(Continued)

Cost of revenues for information technology solutions increased approximately
$114 million, 101.8%, from $112 million to $226 million.  This increase was
primarily attributable to an increase in salaries, benefits and employee
related costs and  depreciation and amortization expenses.  Salaries,
benefits and employee related costs increased due to an increase in
the average number of employees necessary to support the Company's business
growth and annual salary increases.  The increase in depreciation and
amortization expense is primarily due to the acquisition of information
technology assets to support the US Airways' contract and other normal
additions and replacements.

SELLING, GENERAL AND ADMINSTRATIVE EXPENSES.  Selling, general and
administrative expenses increased $4 million, 9.5%, from $42 million to $46
million primarily due to an increase in salaries and benefits.
Salaries and benefits increased as a result of sales growth initiatives and
increased administrative requirements to support the Company's growth.

OPERATING INCOME.  Operating income increased $9 million, 10.1%, from $89
million to $98 million.  Operating margins decreased from 19.6% in 1997 to
16.3% in 1998 due to an increase in revenues of 32.1% while operating
expenses increased 37.5%.

INTEREST INCOME.  Interest income decreased $2 million due to lower average
balances maintained in the Company's short-term investment accounts.

INTEREST EXPENSE.  Interest expense decreased $1 million due to lower
interest rates.

OTHER, NET.  Other, net increased $14 million due to a one-time gain from a
favorable court judgment relating to Ticketnet Corporation, an inactive
subsidiary of the Company.

INCOME TAXES.  The provision for income taxes was $42 million and $36 million
for the three months ended September 30, 1998 and 1997, respectively.  The
increase in the provision for income taxes primarily corresponds with the
increase in net income before the provision for income taxes.

NET EARNINGS.  Net earnings increased $15 million, 26.8%, from $56 million to
$71 million, primarily due to the increase in operating income and the
favorable court judgment regarding Ticketnet Corporation, an inactive
subsidiary of the Company.


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

ELECTRONIC TRAVEL DISTRIBUTION. Electronic travel distribution revenues for
the nine months ended September 30, 1998 increased approximately $95
million, 10.2%, compared to the nine months ended September 30, 1997,
from $928 million to $1,023 million. The increase was primarily due to
growth in booking fees from associates from $841 million to $915
million.  This growth was primarily driven by an overall increase in the
price per booking charged to associates.  Other revenues increased $21 million
primarily due to services provided related to the Company's ABACUS
joint venture.

Cost of revenues for electronic travel distribution increased approximately $63
million, 10.2%, from $619 million to $682 million.  This increase was
primarily attributable to increases in depreciation and amortization,
subscriber incentives, salaries, benefits and employee related costs and other
operating expenses. Depreciation and amortization expense increased primarily
due to shorter depreciable lives on purchased subscriber equipment reflecting
increased technological changes and increases in capitalized software and other
long-term assets.  Subscriber incentive expenses increased in order to maintain
and expand the Company's travel agency subscriber base. Salaries, benefits and
employee related costs increased primarily due to annual salary
increases. Other operating expenses increased primarily due to equipment
maintenance costs and other software development expenses related to the
Company's Year 2000 compliance program.

 <PAGE> 12
THE SABRE GROUP HOLDINGS, INC.
RESULTS OF OPERATIONS (Continued)

INFORMATION TECHNOLOGY SOLUTIONS.  Revenues from information technology
solutions for the nine months ended September 30, 1998 increased
approximately $293 million, 69.9%, compared to the nine months ended
September 30, 1997, from $419 million to $712 million.  Revenues from
unaffiliated customers increased approximately $252 million, primarily
related to services performed under the information technology
services agreement with US Airways and Year 2000 testing and compliance
enhancements for Canadian Airlines.  Revenues from affiliated customers
increased approximately $41 million, primarily related to Year 2000 services
performed for AMR.

Cost of revenues for information technology solutions increased approximately
$274 million, 86.2%, from $318 million to $592 million.  This increase was
primarily attributable to an increase in salaries, benefits and
employee related costs and depreciation and amortization expenses.  Salaries,
benefits and employee related costs increased due to an increase in
the average number of employees necessary to support the Company's business
growth and annual salary increases. The increase in depreciation and
amortization expense is primarily due to the acquisition of information
technology assets to support the US Airways' contract and other normal
additions and replacements.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.
Selling, general and administrative expenses increased $21 million, 17.9%,
from $117 million to $138 million primarily due to an increase in salaries
and benefits and legal and professional fees.  Salaries and benefits
increased as a result of sales growth initiatives and increased
administrative requirements to support the Company's growth.  Legal and
professional fees increased primarily due to the formation of the ABACUS
joint venture and the growth of outsourcing activity.

OPERATING INCOME.  Operating income increased $29 million, 9.9%, from $293
million to $322 million.  Operating margins decreased from 21.7% in 1997 to
18.6% in 1998 due to an increase in revenues of 28.8% while operating
expenses increased 34.0%.

INTEREST INCOME.  Interest income decreased $3 million due to lower average
balances maintained in the Company's short-term investment accounts.

INTEREST EXPENSE.  Interest expense decreased $2 million due to lower
interest rates.

OTHER, NET.  Other, net increased $14 million due to a one-time gain from a
favorable court judgment relating to Ticketnet Corporation, an inactive
subsidiary of the Company.

INCOME TAXES.  The provision for income taxes was $128 million and $116
million for the nine months ended September 30, 1998 and 1997, respectively.
The increase in the provision for income taxes corresponds with the increase
in net income before the provision for income taxes.

NET EARNINGS.  Net earnings increased $31 million, 17.1%, from $181 million
to $212 million, primarily due to the increase in operating income and the
favorable court judgment regarding Ticketnet Corporation, an inactive
subsidiary of the Company.


LIQUIDITY AND CAPITAL RESOURCES

The Company had substantial liquidity at September 30, 1998, with
approximately $460 million in cash and short-term investments and $474
million in working capital.  At December 31, 1997, cash and short-term
investments and working capital were $585 million and $558 million,
respectively.

AMR performs cash management services for the Company under the Management
Services Agreement.  The Company invests cash in short-term marketable
securities, consisting primarily of certificates of deposit, bankers'
acceptances, commercial paper, corporate notes and government notes.

<PAGE> 13
THE SABRE GROUP HOLDINGS, INC.
LIQUIDITY AND CAPITAL RESOURCES (Continued)

The Company has funded its operations through cash generated from operations.
The Company's cash provided by operating activities of $346 million and
$290 million for the nine months ended September 30, 1998 and 1997,
respectively, was primarily attributable to net earnings before non-cash
charges.

Capital investments for the nine months ended September 30, 1998 and 1997 were
$430 million and $188 million, respectively.  For the nine months ended
September 30, 1998, capital investments included capital expenditures for
property and equipment of $260 million, including $47 million for information
technology assets acquired from US Airways, and $140 million related to the
Company's interest in the ABACUS joint venture.  The Company has estimated
capital investments of approximately $500 to $550 million for 1998.

The Company expects that the principal use of funds in the foreseeable future
will be for capital expenditures, software product development, acquisitions
and working capital.  Capital expenditures will primarily consist of
purchases of equipment for the data center, as well as computer equipment to
support (i) updating existing subscriber equipment, (ii) expansion
of the subscriber base and (iii) new product capital requirements. The
Company believes available balances of cash and short-term investments
combined with cash flows from operations will be sufficient to meet the
Company's capital requirements.

The Company currently intends to retain its earnings to finance future growth
and, therefore, does not anticipate paying any cash dividends on its common
stock in the foreseeable future.  Any determination as to the payment of
dividends will depend upon the future results of operations, capital
requirements and financial condition of the Company and its subsidiaries
and such other factors as the Board of Directors of the Company may consider,
including any contractual or statutory restrictions on the Company's
ability to pay dividends.

In 1997, the Company's Board of Directors authorized, subject to certain
business and market conditions, the repurchase of up to 1.5 million shares
of the Company's Class A Common Stock.  During the nine months ended
September 30, 1998, the Company purchased approximately 1.4 million treasury
shares at a cost of approximately $49 million.

YEAR 2000 COMPLIANCE

STATE OF READINESS. In 1995, the Company implemented a project intended to
ensure that hardware and software systems operated or licensed in the Company's
business, including systems provided to its travel agency subscribers and its
outsourcing customers, are designed to operate and properly manage dates
beyond 1999 ("Year 2000 Compliant"). Substantially all of the Company's core
systems are either completed or in the final testing phases of the Year 2000
project. The Company expects its Year 2000 project to be substantially
completed in the first quarter of 1999 and believes that it has allocated
adequate resources to meet this goal.

Using dedicated testing environments and applying rigorous test standards,
the Company is actively testing its hardware and software systems, including
those provided by third parties, and system interfaces with its principal
data suppliers, subscribers and participants, to determine if they are Year
2000 Compliant.

The advance booking and planning needs of many of the Company's customers
make it desirable for the Company's computer systems to be Year 2000 Compliant
in the first quarter of 1999. The Company's real-time computer systems,
including the SABRE computer reservations system, are now Year 2000 Compliant,
with only testing of minor subsystems remaining to be completed. The Company
has also substantially completed testing of the other software systems that
it operates.

The Company is installing Year 2000 Compliant hardware and software at its
subscriber locations, and it expects to be completed by the first quarter of
1999. The Company expects software marketed by SABRE Technology Solutions to be
substantially Year 2000 Compliant in the second quarter of 1999.

 <PAGE> 14
THE SABRE GROUP HOLDINGS, INC.
LIQUIDITY AND CAPITAL RESOURCES (Continued)

COSTS OF YEAR 2000 PROJECT. The Company expects to incur significant internal
labor costs, as well as consulting and other expenses in its Year 2000
project. The Company's total estimated cost of the project is approximately
$80 to $95 million, of which approximately $57 million, cumulatively, was
incurred as of September 30, 1998. The Company expects to incur most of the
expenses related to the Year 2000 project by the end of 1998. A portion of
these costs will not be incremental costs to the Company, but rather will
represent the re-deployment of information technology resources. Costs
associated with the Year 2000 project will be expensed as incurred and will
be paid from operating cash flows.

RISKS OF YEAR 2000 NON-COMPLIANCE. The economy in general, and the travel and
transportation industry in particular, may be adversely affected by risks
associated with the Year 2000. The Company's business, financial condition,
and results of operations could be materially adversely affected if systems
that it operates or licenses to third parties, or systems that are operated
by other parties (e.g., utilities, telecommunications service providers, data
providers, associates, credit card transaction processors) with which the
Company's systems interface, are not Year 2000 Compliant in time. There can
be no assurance that these systems will continue to properly function and
interface and will otherwise be Year 2000 Compliant.  Although the Company is
not aware of any threatened claims related to the Year 2000, the Company may be
subject to litigation arising from such claims and, depending on the outcome,
such litigation could have a material adverse affect on the Company. It is not
clear whether the Company's insurance coverage would be adequate to offset
these and other business risks related to the Year 2000.

The expected costs and completion dates for the Year 2000 project are forward
looking statements based on management's best estimates, which were derived
using numerous assumptions of future events, including the continued
availability of resources, third party modification plans and other factors.
Actual results could differ materially from these estimates as a result of
factors such as the availability and cost of trained personnel, the ability to
locate and correct all relevant computer codes, and similar uncertainties.

CONTINGENCY PLANS. To the extent possible, the Company will develop and
implement contingency plans designed to allow continued operations in the
event of failure of the Company's or third parties' systems to be Year
2000 Compliant. For example, the Company plans to have dedicated staff
available at crucial dates to remedy unforeseen problems and may install
defensive code to protect its real-time systems from improperly formatted
date data supplied by third parties.


NEW EUROPEAN CURRENCY

In January 1999, certain European countries are scheduled to introduce a new
currency unit called the "euro". The Company has implemented a project
intended to ensure that hardware and software systems operated or licensed
in the Company's business, including systems provided to its travel agency
subscribers and its outsourcing customers, are designed to properly
handle the euro. The Company expects its euro project to be substantially
completed in the fourth quarter of 1998 and believes that it has allocated
adequate resources to meet this goal. The Company estimates that the
introduction of the euro, including the total cost for the euro project,
will not have a material effect on the Company's business, financial
condition, and results of operations. The projected costs and completion
dates for the Company's euro project are forward looking statements that are
based on management's best estimates. Actual results could differ materially
from these estimates.

<PAGE> 15
THE SABRE GROUP HOLDINGS, INC.
CAUTIONARY STATEMENT

Statements in this report which are not purely historical facts, including
statements regarding the Company's anticipations, beliefs, expectations, hopes,
intentions or strategies for the future, may be forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. All forward looking statements in this report are based upon
information available to the Company on the date of this report. The Company
undertakes no obligation to publicly update or revise any forward
looking statements, whether as a result of new information, future events or
otherwise. Any forward looking statements involve risks and uncertainties
that could cause actual events or results to differ materially from the
events or results described in the forward looking statements.  Readers are
cautioned not to place undue reliance on these forward looking statements.

Risks associated with the Company's forward looking statements include, but
are not limited to: risks related to the Company's relationships with American
and US Airways and their affiliates, including risks that they may terminate
any of the agreements with the Company, or fail or otherwise become unable to
fulfill their principal obligations thereunder, or determine not to renew
certain of the agreements; risks associated with competition, and technological
innovation by competitors, which could require the Company to reduce prices,
to change billing practices, to increase spending or marketing or product
development or otherwise to take actions that might adversely affect its
operations or earnings; risks related to the Company's technology, such as a
failure to timely achieve Year 2000 or euro currency compliance; risks
related to seasonality of the travel industry and booking revenues; risks of
the Company's sensitivity to general economic conditions and events
that affect airline travel and the airlines that participate in the SABRE
system; risks of a natural disaster or other calamity that may cause
significant damage to the Company's data center facility; risks associated
with the Company's international operations, such as currency fluctuations,
governmental approvals, tariffs and trade barriers; risks of new or different
legal and regulatory requirements; and risks associated with the Company's
growth strategy, including investments in emerging markets and the ability to
successfully conclude alliances.


              PART II:  OTHER INFORMATION
                           
ITEM 1.  LEGAL PROCEEDINGS

In connection with the Reorganization, the Company is the successor in
interest to American in the following two civil proceedings concerning disputed
booking fees.

     In 1995, America West Airlines, Inc. ("America West") began withholding
SABRE booking fees that it claims were assessed in contravention of America
West's SABRE participation agreement. American and SABRE Associates, Inc.,
filed a lawsuit against America West in the District Court of Tarrant County,
Texas, 153rd Judicial District, to recover the unpaid booking fees
from America West.  On April 10, 1997, the District Court of Tarrant County,
Texas granted the Company's motion of summary judgment as to the proper
interpretation of the contract, upholding the Company's position.  On April
21, 1997, America West paid the Company $2.9 million in past due booking
fees, with a stipulation that preserves its rights in the lawsuit.  America
West has pending counter-claims against the Company claiming breach of contract.

     In June 1996, American Trans Air, Inc. ("ATA") filed a lawsuit against
American in the U.S. District Court for the Southern District of Indiana,
Indianapolis Division seeking a refund of over $400,000 in SABRE booking fees
on similar grounds to America West's claims.  In addition, since June 1996,
ATA has withheld payment of more than $300,000 in SABRE booking fees.  The
Company filed a motion for summary judgment in the ATA lawsuit which is similar
to the one granted in the America West lawsuit. ATA filed a cross-motion for
summary judgment similar to the one filed by America West claiming its
interpretation of the contract is the correct one.  On August 12, 1998,
the District Court denied ATA's motion in its entirety and granted the
Company's motion as to the definition of a "booking" and the validity of the
charges under the participation agreement.

     If either ATA or America West were to prevail on their claims, other
associates might make similar claims.  Nevertheless, the Company believes that
the booking fees are properly charged pursuant to its contracts and that the
claims of ATA and America West can be successfully defended or resolved without
a material adverse effect on the Company's financial position or results of
operations.

<PAGE> 16
THE SABRE GROUP HOLDINGS, INC.
OTHER INFORMATION (Continued)

     On January 9, 1998, Worldspan LP, the former provider of
computer reservation system services to ABACUS International Holdings,
filed a lawsuit against the Company in the United States District Court for
the Northern District of Georgia, Atlanta Division, seeking damages and an
injunction, and alleging, among other things, that the Company interfered with
Worldspan's relationship with ABACUS, violated the U.S. antitrust laws, and
misappropriated Worldspan's confidential information.  The same day, Worldspan
filed a parallel lawsuit in the same court against ABACUS. On February 26,
1998, the court denied Worldspan's motion for a preliminary injunction
against ABACUS.  Thereafter, the court stayed the ABACUS case pending
arbitration between ABACUS and Worldspan. On September 16, 1998, the court
denied motions by the Company to dismiss Worldspan's lawsuit against the
Company or to stay the case pending arbitration between ABACUS and Worldspan.
The Company believes that Worldspan's claims are without merit and is
vigorously defending itself.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

<PAGE> 17
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are included herein:
<TABLE>

EXHIBIT NUMBER      DESCRIPTION OF EXHIBIT
<S>                 <C>
3.1                 Restated Certificate of Incorporation of
                    Registrant. (1)
3.2                 Restated Bylaws of Registrant. (1)
4.1                 Registration Rights Agreement between
                    Registrant and AMR Corporation. (1)
4.2                 Specimen Certificate representing Class A
                    Common Stock. (1)
10.1                Registration Rights Agreement between
                    Registrant and AMR Corporation
                    (See Exhibit 4.1).
10.2                Intercompany Agreement, dated as of July 2,
                    1996, among Registrant, The SABRE Group,
                    Inc., TSGL Holding, Inc., TSGL-SCS, Inc.,
                    TSGL, Inc., SABRE  International, Inc., SABRE
                    Servicios Colombia, LTDA and American Airlines, Inc. (1)
10.3                Management Services Agreement, dated as of
                    July 1, 1996, between The SABRE
                    Group, Inc. and American Airlines, Inc. (1) (4)
10.4                Credit Agreement, dated as of July 1, 1996,
                    between Registrant, The SABRE
                    Group, Inc., AMR Corporation and
                    American Airlines, Inc. (1)
10.5                $850,000,000 Subordinated Debenture, dated
                    July 2, 1996, executed by  Registrant and payable to AMR
                    Corporation. (1)
10.6                Information Technology Services Agreement,
                    dated July 1, 1996, between The
                    SABRE Group, Inc. and American
                    Airlines, Inc. (1) (4)
10.7                Non-competition Agreement, dated July 1,
                    1996, among Registrant, The SABRE Group, Inc., AMR
                    Corporation and American Airlines, Inc. (1)
10.8                Marketing Cooperation Agreement, dated as of
                    July 1, 1996, between The SABRE Group, Inc. and American
                    Airlines, Inc. (1) (4)
10.9                Tax Sharing Agreement, dated July 1, 1996, between
                    The SABRE Group, Inc. and American Airlines, Inc. (1)
10.10               Travel Privileges Agreement, dated as of
                    July 1, 1996, between The SABRE Group, Inc. and American
                    Airlines, Inc. (1) (4)
10.11               Corporate Travel Agreement, dated July 25,
                    1996, between The SABRE Group, Inc. and
                    American Airlines,  Inc. (1) (4)
10.12               Software Marketing Agreement, dated
                    September 10, 1996, among Registrant, The SABRE Group,
                    Inc. and AMR Corporation. (1) (4)
10.13               Canadian Technical Services Subcontract,
                    dated as of July 1, 1996, between The SABRE Group, Inc.
                    and American Airlines, Inc. (1)(4)
10.14               Form of Participating Carrier Agreement
                    between The SABRE Group, Inc.
                    and American Airlines, Inc. (1)
10.15               Investment Agreement, dated September 11,
                    1996, between The SABRE Group,
                    Inc. and AMR Investment
                    Services, Inc. (1) (4)
10.16               Assignment and Amendment Agreement, dated as
                    of July 1, 1996, among The SABRE Group,
                    Inc., American Airlines, Inc. and
                    the Dallas-Fort Worth
                    International Airport Board. (1)
10.17               American Airlines Special Facilities Lease
                    Agreement, dated October 1, 1972,
                    between American Airlines, Inc.
                    and the Dallas-Fort Worth
                    Regional Airport Board, as
                    amended by Supplemental
                    Agreements Nos. 1-5. (1)
10.18               Assignment Agreement, dated as of July 1,
                    1996, between The SABRE Group,
                    Inc. and American Airlines, Inc. (1)
10.19               Sublease, dated June 1, 1958, between
                    American Airlines, Inc. and the
                    Trustees of the Tulsa Municipal
                    Airport Trust, as amended by Amendments
                    Nos. 1- 12. (1)
10.20               Assignment Agreement, dated as of July 1,
                    1996, between The SABRE Group, Inc. and American
                    Airlines, Inc. (1)
10.21               Amended and Restated Sublease Agreement,
                    dated May, 1996, between American Airlines, Inc.
                    and the Tulsa Airports Improvement Trust. (1)
                    
</TABLE>
<PAGE> 18
<TABLE>
EXHIBIT NUMBER      DESCRIPTION OF EXHIBIT
<S>                 <C>
10.22               Assignment Agreement, dated as of July 1,
                    1996, between The SABRE Group, Inc. and American
                    Airlines,  Inc. (1)
10.23               Office Lease Agreement, dated as of January
                    19, 1996, between American Airlines, Inc. and
                    Maguire/Thomas Partners-Westlake/Southlake Partnership.
                    (1)
10.24               American Airlines, Inc. Supplemental
                    Executive Retirement Plan dated
                    November 16, 1994. (2)
10.25               The SABRE Group Holdings, Inc. Long-Term
                    Incentive Plan. (1)
10.26               The SABRE Group Holdings, Inc. Directors
                    Stock Incentive Plan. (1)
10.27               Form of Executive Termination Benefits
                    Agreement. (1)
10.28               Employment Agreement, dated August 30, 1996,
                    between The SABRE Group, Inc.and  Michael J. Durham. (1)
10.29               Employment Agreement, dated September 7,
                    1995, between American Airlines, Inc. and
                    Thomas M. Cook. (1)
10.30               Employment Agreement, dated May 7, 1996,
                    between American Airlines, Inc. and Terrell B. Jones. (1)
10.31               Letter Agreement, dated July 15, 1996,
                    between Registrant and Thomas M. Cook. (1)
10.32               Letter Agreement, dated July 15, 1996,
                    between Registrant and Terrell B. Jones. (1)
10.33               The SABRE Group Holdings, Inc. Employee
                    Stock Purchase Plan. (3)
10.34               Option Issuance Agreement, dated January 1,
                    1998 between Registrant and US Airways, Inc.(5)
10.35               The SABRE Group Holdings, Inc. Deferred Compensation
                    Plan.(6)
21.1                Subsidiaries of Registrant.
27.1                Financial Data Schedule.
27.2                Restated Financial Data Schedule as of
                    September 30, 1997.
</TABLE>
(1)  Incorporated by reference to exhibits 3.1 through 10.32 to the Company's
     Registration Statement on Form S-1 (Registration No. 333-09747).
     
(2)  Incorporated by reference to Exhibit 10(mmm) to AMR's report on Form
     10-K for the year ended December 31, 1994, (File No. 1-8400).
     
(3)  Incorporated by reference to Exhibit 4.1 to the Company's Registration
     Statement on Form S-8 (Registration No. 333-18851).
     
(4)  Confidential treatment was granted as to a portion of this document.
     
(5)  Incorporated by reference to Exhibit 10.34 to the Company's report on
     Form 10-K for the year ended December 31, 1997, (File No. 1-12175).

(6)  Incorporated by reference to Exhibit 4.1 to the Company's Registration 
     Statement on Form S-8 (Registration No. 333-51291).

FORM 8-K

On August 24, 1998, the Company filed a report on Form 8-K regarding the
resolution of certain legal proceedings relating to Ticketnet Corporation.

<PAGE> 19
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                               THE SABRE GROUP HOLDINGS, INC.
Date:  November 16, 1998       BY:      /s/ Jeffery M.Jackson
                               Jeffery M. Jackson
                               Senior Vice President, Chief Financial Officer
                               and Treasurer
                               (Principal Financial and Accounting Officer)