Southwest to spend $500mn to update ‘old’ technology

Bloomberg

Southwest Airlines Co. plans to shift its domestic reservation system to a new platform on Tuesday, attempting to avoid the havoc that plagued similar transitions at other carriers.
“These are very complicated,” said Bob Edwards, a former chief information officer at United Airlines who supervised the merger of reservation systems for United and Continental in 2012. “All of them are serious and high risk. Anything can go wrong.”
Southwest’s update is particularly important as the carrier has expanded to international markets and become the biggest US airline by domestic passengers. The change will give the airline the same ability as rivals to accept foreign currency, recover faster from storms and change schedules more easily.
Customers shouldn’t notice differences to the booking process — assuming all goes smoothly. The transition comes just four months after United Continental Holdings Inc. and Delta Air Lines Inc. were forced to ground flights because of computer failures and less than a year after a Southwest systems outage forced the cancellation of 2,300 flights. Southwest is spending $500 million, its biggest technology update ever, as it moves from a 30-year-old system. The Dallas-based company began using the new tools in December to book customers who were traveling May 9 and later to phase in the transition. The three-year process has included extensive employee training and months of testing.
Edwards put Southwest’s degree of difficulty at five on a scale of 1 to 10 and said the carrier “will probably have a pretty quiet transition.” The airline has a leg up since it is avoiding a large-scale shift of passenger itineraries all at once and because the carrier’s international system already is on the Amadeus IT Group SA platform that is being adopted domestically.

Changing Schedules
Passenger check-in, boarding, baggage handling, seat inventory management and re-accommodating travelers are among the functions shifting to Amadeus. The update will allow Southwest to change fares more easily and vary flight schedules more. The airline currently does much of the scheduling manually, so essentially flies the same schedules Sunday through Friday.
A new system could help avoid the type of problems the airline faced in July, when the failure of a data router and its backup led to the 2,300 flight cancellations. “Old technology” was behind the network outage, Chief Executive Officer Gary Kelly said at the time.
The new Amadeus system has been used on some routes already, and Southwest has trained 20,000 employees, Kelly said in recent interview. The airline also has beefed up staffing to “make darn sure we’re very well prepared,” he said.

Merger Pains
Transitions at some other carriers have caused disruptions, though the biggest problems stemmed from the more difficult task of combining systems after a corporate merger. United grappled with higher call volume over three days when it blended websites and systems of its merged airlines in 2012. In 2007, US Airways struggled for more than 10 days to fix glitches in the systems combination with America West.
American Airlines Group Inc.’s shift to a single reservations operation with merger partner US Airways in October 2015 was largely problem-free, however.
The carrier had moved US Airways reservations to the combined system over 90 days rather than in one step.
Southwest is trying to pull off a similarly smooth rollout.
“We have worked to minimize risk in that we’ve been putting in pieces for almost a year now,” Bob Jordan, Southwest’s chief commercial officer, said at a House committee hearing May 3 on airline customer service. “We’ve tested this product more than any IT implementation we’ve ever done.”