The Wall Street Journal Online
Glitches that can ground hundreds of flights are becoming routine as U.S. airlines battle the vast, aging information technology that keeps them aloft.
Mergers have left a handful of big carriers operating many more flights with millions more passengers. Systems designed decades ago to automate simple tasks like selling tickets to travel agents now underpin huge networks that set prices and schedules, communicate with mobile apps and assist pilots before takeoff.
"Complexity is the reason airlines have outages," said Bill Curtis, chief scientist of CAST Research Labs, a French firm that evaluates IT software, but hasn't looked specifically at U.S. carriers. "These systems are huge. They're on different platforms, on different languages. It's a body of logic and it all has to work together."
Industry statistics don't track outages over time, but most major carriers have faced IT breakdowns in recent years. Breakdowns are becoming a hazard as enraging to customers as bad weather and air-traffic congestion.
"There's no excuse these days for an airline not to have an IT system that's tight," said Eric Schiffer, chairman of ReputationManagementConsultants.com, which consults to many industries, including airlines. "It's pure craziness that we continue to see these problems."
There's no quick fix. Airlines can't take some of their systems offline for tests because flights are almost always in the air. Most airlines are supported in their customer reservations systems by about one of four vendors world-wide. Building a new system from scratch would be expensive and risky, said technology experts and airline executives.
A new reservation system "does not provide enough benefits to take investment away from other technologies," said United Continental Holdings Inc. Flight delays due to tech issues fell 50% in 2016 from a year earlier, United said, based on continuous upgrades. In an investor presentation this week United said its IT budget this year will be 400% larger than in 2012, without disclosing a sum.
Delta Air Lines Inc. said it is investing hundreds of millions of dollars in information technology. American Airlines Group Inc. said it has made big IT investments—it declines to specify how much it spent—after merging with US Airways in 2013. "It's something our team members and customers count on every day," American said.
Airlines raised IT spending to 3% of revenue in 2016 from 2.7% in 2015, according to a recent survey of more than 100 carriers world-wide. But the outlay remains small compared with spending on aircraft and airport projects, or recent share buyback programs.
According to the annual survey, airlines spend the bulk of their IT funds on maintenance, software development and telecommunications, but they also invest in new products and mobile devices.
Glitches have piled up in the past nine months. A single failed computer router last July forced Southwest Airlines Co. to cancel 2,300 flights over four days. The discount carrier's customer-service reputation was dented, contributing to a $55 million decline in revenue and $24 million in added costs in the third quarter.
A month later, a power surge and fire took down Delta's system, scrubbing 2,100 flights over three days and stranding passengers world-wide. Chief Executive Ed Bastian said at the time it was a one-time event. Another breakdown forced Delta to cancel 280 flights over two days in January. The airline's website and mobile app were down briefly earlier in March.
United's latest outage last month delayed about 500 flights, 10% of its daily schedule. In January, a software error in a system that sends text messages to pilots before takeoff froze departures for 2½ hours, leading to 12 cancellations and 250 delays. American had a four-hour internet outage at its Philadelphia hub in February that required a temporary halt of its planes destined for that airport.
Other industries including banking, insurance and retail have suffered similar problems. An outage earlier this month at Amazon.com's cloud-service unit disrupted internet traffic across much of the U.S. In 2015 a faulty software upgrade caused a four-hour outage at the New York Stock Exchange.
But when technology cripples airlines, executives say customers put added pressure on them to resolve things quickly. "If you miss your business meeting, your friend's wedding or the first day of your vacation, you're mad," said one large airline's chief technology officer. "Because of the industry we're in, it's more visible."
The airlines' poor track record hasn't gone unnoticed in Congress. Two House Democrats on March 8 introduced a bill that would increase airline consumer protections, in part by requiring that carriers tell passengers whether or not they will provide hotel accommodations and a meal voucher if computer network failures delay or cancel flights.
Southwest in May plans to replace much of its 30-year-old IT system, a $500 million investment. "We're certainly taxing it now with our scale," said President Tom Nealon said of the current, bare-bones system. "We would obviously strive for extreme reliability."
Southwest hopes the new reservation system from Madrid-based Amadeus IT Group SA will give customers more choices and boost revenue. The system will allow Southwest to change its schedule on the fly, sell in foreign currencies, and automatically rebook passengers disrupted by bad weather.
The company, which has been selling international tickets on the Amadeus platform since 2014, late last year added its more numerous domestic tickets for travel starting in May. The crucial test will be whether Southwest's airport kiosks, gate readers and check-in computers move seamlessly from the old to the new system.
"It's like a neural system," Mr. Nealon said. "You have to pull the old things out and put the new things in carefully."
This article was licensed through Dow Jones Direct.
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