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Tim Green

Outages Show Airlines Still Have IT Work to Do

by Tim Green | Dun & Bradstreet Editor

August 15, 2016 | No Comments »

Southwest Airlines in July. Delta Air Lines in August. Two airlines, two months, two rounds of thousands of flight cancellations. Thousands of angry customers.

Is another airline — and its passengers — in line for a similar situation? Don’t bet against it.

In July a problem with a network router caused a technology outage that forced Southwest to ground more than 2,300 flights, which the airline estimates will cost $54 million-$82 million. Last week the Dallas-based carrier reported cancellations cut its operating revenue per available seat mile, a key measure of airline profitability, by 0.5 points for the third quarter compared to the 2015 third quarter.

Delta is still sorting through the impact of its more than 2,000 canceled flights, but the costs are likely to be in the millions. The company has said that a power surge knocked out power and that backup systems didn’t kick in, resulting in a system outage.

Technology glitches, which also have hit American and United flights in recent years, have clouded otherwise blue skies for airlines. Lower oil prices helped lift airline profits to a record height of $25.6 billion in 2015.

So it’s not as if airlines don’t have the money to upgrade and expand their computer systems. They do and have. Results can be seen in mobile apps, reservation systems, and better baggage-tracking systems.

Delta’s technology spending jumped to $722 million in 2015 from $587 million in 2014 and $404 million in 2013. Delta’s CEO has said the company has spent $150 million on IT infrastructure updates in the past two years.

One of Delta’s biggest IT-related expenditures recently has been a $50 million baggage-tracking system. Delta, which handles 120 million pieces of luggage a year, has equipped its stations at 344 airports around the world with Radio Frequency Identification (RFID) technology. It enables the airline to track bags from check-in through transfers to the baggage carousel at the destination airport. Passengers can track their bags from their mobile apps.

The deployment, to be completed by year-end, includes 4,600 scanners and 3,800 RFID bag-tag printers to enable hands-free scanning of baggage. Delta has been experimenting with RFID technology since 2003.

It’s nice to know where your luggage is because that should mean you and your bags are in motion.

Southwest is in the midst of installing a new, comprehensive reservation system at a cost of $500 million. It grew out of its 2011 acquisition of AirTran, which flew international routes. The new reservation system can handle domestic flights and the international routes that AirTran brought with it. Southwest began using the new system for international service in 2014 and expects it to handle all of its flights in 2017.

Making reservations and delivering baggage on arrival are basic services of an airline. Passengers welcome improvements that makes those functions run more smoothly. And most often things do run smoothly.

But the recent snafus show that airlines still have work to do.

At Delta, the task of cleaning up the mess and preventing others falls to its new CIO, Rahul Samant. He joined the company in February from American International Group.

When Delta announced Samant’s hiring, it said he would oversee initiatives to introduce new technology, integrate platforms, ensure security, and implement new products faster.

Since last week some basic system testing and backups might have shot to the top of that to-do list.

Tim Green has covered business, technology and science at newspapers and in higher education. At Hoover’s he covers computers and telecommunications. Follow him on Twitter.

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Photo by Alex Proimos, used here under a Creative Commons license.

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