AJC on Southwest / Airtran merger

[Dont call me Shirley]

http://www.ajc.com/business/southwest-shifting-some-atlanta-1406021.html

Southwest Airlines’ transition of AirTran Airways flights into Southwest service hasn't been all smooth sailing since the merger last year.

Some Southwest flights will temporarily shift back to Air Tran service.

Biz Beat blog
The gradual conversion of AirTran's large Atlanta operation is bringing Southwest some unusual challenges and in the latest round of ongoing flight changes, the airline is temporarily shifting some Southwest flights in Atlanta back to AirTran service....

I kunderstand that there some major IT issues; the article does not go very much into that.

IFIAK, WN's res system is based on the former Braniff system; what does FL use, Sabre?
Has a decision been made on which system to use post merger?

 

[BoeingBoy]

From what I've read, WN's res system won't handle international ticketing. Don't know and haven't read about specifically why.

Jim

 

[WorldTraveler]

given that there is so much interest in Hawaii with the arrival of the 738s, I'd like to know if they have addressed the capability to address taxes to/from Hawaii. Even though HA and AK flying is still with the USD, it is taxed very differently because large portions of the trip are over international waters for which there are no US taxes. AK and HA taxes are just as complex if not moreso than int'l fares... and don't even get started on transborder (US-Canada) taxes.
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Somewhere on this forum there is an article quoting Kelly as saying they don't have a firm date for when codeshare capabilities will be incorporated into their res system or even that doing so is a number one priority item. A little surprising considering the number of WN metal flights that are operating out of ATL and the number of FL metal flights that are operating in predominantly strong WN cities....
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It just may be that WN will accelerate the end of the FL operations in order to more quickly cut its losses in ATL.... for now the FL brand has been neutered in ATL - and elsewhere - and the strength of the FL hub has been weakened by pulling out key connecting flows... it is bound to have a negative effect on earnings until there is either a codesharing solution in place or ATL becomes an all WN or all FL operation and then a full scale cutover occurs on one single day.

 

[eolesen]

IFIAK, WN's res system is based on the former Braniff system; what does FL use, Sabre?
Has a decision been made on which system to use post merger?

FL uses Navitaire, WN uses SAAS, which yes, they got indirectly from the BN estate sale.

WN haven't commented lately on who they're still talking to, but WN likely won't be using either one post-merger. It will either be full-blown Sabre or Amadeus.

http://www.tnooz.com/2010/12/16/news/southwest-considering-sabre-or-amadeus-for-new-reservations-system/

http://crankyflier.com/2010/11/02/southwest-explains-the-reservation-system-delays/

From what I've read, WN's res system won't handle international ticketing. Don't know and haven't read about specifically why.

I suspect that's just a generalization to help keep the description simple.... Sabre took a port of their e-Ticket server and plugged it into SAAS a few years back, which presumably included the abilty to manage tax tables. Handling PFC's isn't all that different from trying to figure out which taxes go where on an international ticket.

What likely doesn't exist within SAAS is the ability to manage sales outside the US in multiple currencies. There's also no real ability to facilitate codesharing.

For whatever reason, Sabre never got codesharing to work in SAAS. The one-way codeshare with TZ required a lot of manual & robotic back-office work to keep things in synch. That won't work with the scale of FL's operation.

With all the attention that UA's cutover received plus the article in Terry Maxon's blog a few days back, I suspect WN will be getting a few questions on their res system during their upcoming earnings call.

 

[WorldTraveler]

With all the attention that UA's cutover received plus the article in Terry Maxon's blog a few days back, I suspect WN will be getting a few questions on their res system during their upcoming earnings call.

thanks for the updated info, Eric.
Since BN was an int'l carrier, do you know how they did int'l pricing?
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It seems incredible that airlines the size of WN and UA are tripping over technology decades after the airline CRS was invented... but it also goes to show that the lack of investment in basic support systems for an airline can very quickly come back to bite.
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It will be very interesting to watch how WN progresses w/ this....

 

[eolesen]

Since BN was an int'l carrier, do you know how they did int'l pricing?

BN shut down five years before I became an agent, so no clue. Since fares were still highly regulated internationally, it was a totally different world from today.

Guessing they had the ability to manually type in a fare calc when issuing a ticket, based on a TTY rate sheet provided by Tariff. If not that, then handwritten tickets. I was still doing those in 1991 on occasion, and they were still pretty common in the mid 80's.

 

[SharoninSAT]

an updated article...

Updating Southwest Airlines' reservations system

 

[WorldTraveler]

thanks, Sharon.
The last question has got to be the most concerning when it comes to unlocking the potential that came to WN with the FL acquisition.

From the article:
-----
At what point do you see that you'll have an all-new reservations system that can do all the other tasks you'd like it to do as well -- handle service disruptions, optimize pricing, etc.?

It's probably best for me to answer that in a "no-earlier-than" mode. It's not a priority right now, so it really is on the to-do list. I think we can probably start that work next year, and it's got to take at least a couple of years. So it kind of puts you out no earlier than 2015, would be a guess.

But until we actually start the project, scope it, figure all the changes that are going to be made, I don't know, in all fairness. But it needs to be done. We know that. At the appropriate time, we'll get started on that and I'm sure we'll do well when we tackle it.
----

This clearly means that it could take WN years to be able to offer over-the-water flights even to the US (west coast-Hawaii) and/or international on WN's system and/or codesharing w/ FL....

so, WN is reliant on FL's res system to operate int'l flights which could probably do over-the-water flights within the US as well - but both the west coast and Texas (the strongest gateway region WN has) to Latin America is much stronger WN territory than for FL....
but apparently neither system can codeshare well enough to allow WN to join the two systems... which means WN and FL will operate as separate airlines for most purposes for the remainder of this year and perhaps beyond with limited ability to bring the strengths of both airlines together.
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It will be interesting to see what is said on the earnings call later next week (19th I believe), but the res integration of the merger has not been typical of WN's usually good job of planning and execution of strategic endeavors.

 

[xQA4Jet-A]

thanks, Sharon.
The last question has got to be the most concerning when it comes to unlocking the potential that came to WN with the FL acquisition.

From the article:
-----
At what point do you see that you'll have an all-new reservations system that can do all the other tasks you'd like it to do as well -- handle service disruptions, optimize pricing, etc.?

It's probably best for me to answer that in a "no-earlier-than" mode. It's not a priority right now, so it really is on the to-do list. I think we can probably start that work next year, and it's got to take at least a couple of years. So it kind of puts you out no earlier than 2015, would be a guess.

But until we actually start the project, scope it, figure all the changes that are going to be made, I don't know, in all fairness. But it needs to be done. We know that. At the appropriate time, we'll get started on that and I'm sure we'll do well when we tackle it.
----

This clearly means that it could take WN years to be able to offer over-the-water flights even to the US (west coast-Hawaii) and/or international on WN's system and/or codesharing w/ FL....

so, WN is reliant on FL's res system to operate int'l flights which could probably do over-the-water flights within the US as well - but both the west coast and Texas (the strongest gateway region WN has) to Latin America is much stronger WN territory than for FL....
but apparently neither system can codeshare well enough to allow WN to join the two systems... which means WN and FL will operate as separate airlines for most purposes for the remainder of this year and perhaps beyond with limited ability to bring the strengths of both airlines together.
.
It will be interesting to see what is said on the earnings call later next week (19th I believe), but the res integration of the merger has not been typical of WN's usually good job of planning and execution of strategic endeavors.

You are correct in a way, but there is more than meets the public eye as to the Res system & Code sharing. As GK said, there is no system in place to work it perfectly at this time, but there will be. As for now, people flying on WN wanting to get to an FL near Int'l destination simply have to book through each carrier.
Perhaps you have noticed that WN/FL are opening more cities to help with this such as SAT & Orange County. We will get there with growing pains, hernias & toothaches but, we will get it done! Of course, not as Blazingly Fast as the Almighty DAL! There are bigger items on the plate to work through before we worry about who can fly to BDA, MBJ, NAS, PUJ, & SJU.

 

[SharoninSAT]

You are correct in a way, but there is more than meets the public eye as to the Res system & Code sharing. As GK said, there is no system in place to work it perfectly at this time, but there will be. As for now, people flying on WN wanting to get to an FL near Int'l destination simply have to book through each carrier.
Perhaps you have noticed that WN/FL are opening more cities to help with this such as SAT & Orange County. We will get there with growing pains, hernias & toothaches but, we will get it done! Of course, not as Blazingly Fast as the Almighty DAL! There are bigger items on the plate to work through before we worry about who can fly to BDA, MBJ, NAS, PUJ, & SJU.

Well stated xQA! There is a lot to get accomplished and as Gary said, it's all a matter of priority...

 

[gizmo_sc]

Years ago.. back in the mid 1990's I think Delta bought into WORLDSPAN. At the time it was TWA and NW. Delta merged with NW and AA bought TWA. Not sure how AA divested TWA's portion of Worldspan. I am sure that AA sold off TWA's portion of Worldspan. So basically DL was the majority owner of that system. I am giving away my age because I think Delta used to be on DATA @ or something like that. So all along DL has had a strong reservations system to build on. Over the years the major systems have changed. UA moved over to Shares of CO which used to be a system that Eastern had so I guess they sold or gave up on Apollo or what ever its last name was. So again over the years the older reservations systems changed hands and names. I am sure at one point SWA will get hooked up with either Sabre or Amadeus that seems to be the system that is mentioned very often. Anyone care to chime in and fill in the blanks I am kind of doing this by memory with no research on google.

 

[WorldTraveler]

Since DL has been brought into the discussion, the irony is that DL's internal res system (Deltamatic) is a standalone - non-commerical res system that was a failure in the travel agent market. DL was late to the CRS game, attempted to market DLM as an agency res system under the DATAS/DATAS II names but ended up buying into Worldspan. DL planned to kill off DLM w/ the NW merger and use NW's internal version of WSPN but found that DL had built too many unique applications onto DLM and those applications to be moved to WSPN w/o high costs or a significant loss of functionality.
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Specific to DL-WN, the greatest advantage of the FL merger is WN's ability to enter the ATL market. By dividing the operation in ATL between FL and WN with a lack of connection between the two res systems and w/o codesharing, WN has weakened its ATL presence by dividing some of the top markets from ATL between FL and WN - to DL's benefit.
It will take months to see the impact on WN/FL's market share are revenues in the ATL market, but the longer the transition process drags on, the harder it will be for WN to develop a long term advantage in the ATL market.
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No one doubts that mergers are difficult and there will be lots of work to do for months if not years as part of the integration process, but it is truly mindnumbing that WN did not realize the limitations of the two res system before they even closed the deal and either develop alternate plans or set Wall Street expectations about how the merger would progress.
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It also is incredible to consider that the airline industry - which was one of the earliest users of large mainframe computers is now facing two mergers - WN's and UA's - that are facing significant issues because of res systems.
And DL has nothing to do with either of those decisions.

 

[jimntx]

It's probably best for me to answer that in a "no-earlier-than" mode. It's not a priority right now, so it really is on the to-do list. I think we can probably start that work next year, and it's got to take at least a couple of years. So it kind of puts you out no earlier than 2015, would be a guess.

But until we actually start the project, scope it, figure all the changes that are going to be made, I don't know, in all fairness. But it needs to be done. We know that. At the appropriate time, we'll get started on that and I'm sure we'll do well when we tackle it.

The honesty is almost startling. What a concept! Tell the truth. Let the other person deal with the fact that the answer may not be what they want to hear. Just another reason why WN has been so very successful over the years.

 

[WorldTraveler]

The honesty is almost startling. What a concept! Tell the truth. Let the other person deal with the fact that the answer may not be what they want to hear. Just another reason why WN has been so very successful over the years.

except that Wall Street doesn't get real excited when execs in any company say that they haven't thought about major aspects of their operation... IT systems are a necessary part of airline operations.
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WN has succeeded because it has had an IT system that worked just fine for what WN did - one airline, 48 states, no over-the-water flights, no int'l, no seat assignments etc.
Spending a couple billion dollars on buying another airline is worth asking the question if the resources that WN had were sufficient not only for the eventual operation that WN intends to be but also the transition that will have to take place between the FL and WN that exist today and whatever shape WN becomes in the future.
Wall Street will be asking those questions and it isn't unrealistic to think that others will ask too.
The answers will have to come from WN mgmt but I can assure you that LUV's stock price will not support an answer along the lines of "we'll get around to fixing the res problem sometime."

 

[jimntx]

except that Wall Street doesn't get real excited when execs in any company say that they haven't thought about major aspects of their operation... IT systems are a necessary part of airline operations.

He did not say that he hadn't thought about IT systems. He said he didn't know the answer to the question asked. There is a distinct and telling difference between the two. Most airline CEOs would have bluffed through with "I'll have someone from my IT staff call you about the details" and so on and so forth. I love that he said, "I don't know." No CEO of any company knows the answer to everything. That is not what he/she is paid to do.