Inside American Airlines’ Reservations System Merger
Merger Proceeding Smoothly, But Number of Lime Slices Has Yet to be Revealed
When American Airlines announced the date of the final US Airways flight last Friday, it represented the culmination of a long, hard-fought merger that beat the odds (and the anti-trust regulators at the Federal Trade Commission) and may go down in the history books as a model for the industry.
Since the two airlines merged at the end of 2013, they’ve had to consider multiple issues, some relatively mundane and some of great strategic importance. To give the reader an understanding of what recent airline mergers have had to contemplate, here are a few:
• Should we use a red or a blue carpet for the elite passenger boarding line? (United and Continental)
• Should we slice a lime into ten or 16 pieces (Delta and Northwest)
• What should we call business class, Envoy or Business Class? (American and US Airways)
• Should two or three bowling balls be allowed in checked baggage? (United and Continental)
A somewhat weightier and strategic decision for all mergers has been the question of whose IT systems should be utilized post merger.
The new American had to decide whether to use one of its existing reservations and passenger service systems or deploy an entirely new one. In the Delta-Northwest merger, the combined airline chose the larger, i.e. Delta’s, systems. United, on the other hand, when merging with Continental, went in the other direction, because it owned the rights to Continental’s reservations system, and opted to use it even though it was an inferior system that was also not very extensible and, as it turned out, not suitable for running an airline more than twice the size.
United, of course, is still paying for that decision years later with numerous, highly publicized IT failures.
Shortly after the merger was announced, Frequent Business Traveler sat down with US Airways senior vice president of planning and marketing Andrew Nocella, who said then that it would be “premature” to say which system the combined airline would select going forward, but that it would be a 12-to-18 month process. “American has Sabre and US Airway has Shares but if you look at mergers that were successful, you look for where the least disruption would be [in a system conversion],” he said, making an oblique reference to United Continental Holdings’ IT system woes.
Click here to continue to Page 2 – American’s Timeline to a Single Reservations System
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