For years we’ve heard Southwest talk about how its reservation system was preventing the airline from doing all sorts of things. International flying and codesharing are the big two that have been publicly discussed lately, but there are more things that can’t be done because of its ancient system. Despite these issues having been raised for years and year, we’re still at least three years away from a new system coming online. At Media Day last week, I sat with Bob Jordan, EVP Strategy and Planning at Southwest, to better understand why this was taking so friggin’ long.
The question became whether to continue to build on SAAS versus whether it would be available on Sabre, on Amadeus. That discussion started early this year and we came to a decision early summer that the right thing to do was move instead of continuing to build. Then it became, move where?
Having finally made the inevitable decision to move to a new system, now Southwest had to pick which one. And that still hasn’t happened. After the AirTran acquisition was announced, Southwest said it had narrowed the finalists to two vendors, and I can’t imagine AirTran’s vendor is one of those. AirTran uses Navitaire’s New Skies system. That system has more capabilities than the previous Open Skies system, but it is still limited. That’s why we’ve seen airlines like JetBlue leave Navitaire for others, Sabre in JetBlue’s case. They need more complexity, and Southwest needs that now too.
But what’s the timing now? It’s going to be a long time. Now that Southwest has to integrate AirTran, this might delay the new system even longer so that they can work to integrate AirTran first. And then there’s the problem of AirTran’s existing international business. How will they handle that in the meantime?
We’re working on that. We’ve got timing options. International works on Navitaire and we could pursue an option that basically continues to use Navitaire for international but connects SAAS to that, or we could pursue an option where we move the international business first to the new platform.
In other words, it could be a mess for awhile. But once the decision on the vendor is made, hopefully soon, and the project is ready to commence, we still have a long way to go.
It’s probably an 18 to 24 month project once you start, probably 24 month range. We’ve got probably up to a year’s worth of work to complete our requirements gathering and planning before we begin to execute so it’s in the 36 month timeframe.
What we now see at Southwest is an airline that will continue to be hamstrung by its reservation system for years to come. Had it made the decision to switch earlier or kept the project at a high priority, then I’m sure this would be much further along, but now Southwest has to live with electronic handcuffs for a lot longer. And that can’t be good for the business, but, well, they set the priority so they apparently feel comfortable with this timeframe.