In case you missed it, we’ve had a couple of major technical issues with the Big 3 airlines recently. First, United had to ground all their flights for a few hours. This happened on a Sunday evening. That’s one of the worst times an airline could have a problem, since Monday is a busy day for business travel. Luckily, the outage was only a few hours and United was able to get things mostly right by morning.
The very next Sunday, Delta had an outage forcing them to ground their fleet. That outage lasted longer and appeared to have a much more significant impact on Monday travel. There were reports of planes sitting on the tarmac for hours waiting to get a gate Sunday evening. It was just a big mess. American Airlines has had their issues, though not as recently as Delta and United.
Why Does This Happen?
This is a great question. Before I hop up on my soap box, let’s discuss why these outages happen. Not the exact reason for the breakdowns, but the general reason we’re where we are. The Big 3 airlines all have reservations and operations systems that are built on decades old technology. For that matter, so does Southwest. Heck, for a long time Southwest used to schedule their entire fleet on a big Excel spreadsheet. And, it wasn’t that long ago (within the last 10 years, IIRC).
These legacy systems the airlines employ are built on very old technology. They have newer pieces here and there, but the engine is software that hasn’t been considered innovative for a long time. The cost to update their technology (or start over) is likely very high. And, the cost for 100% up-time is equally high. I was having a conversation with a friend who works for IBM. He noted that reliable systems are their bread and butter nowadays, but at a steep price.
I’ve said this before, but we’re way past the time when airlines need to stop relying on systems older than me. Redundancy is essential in today’s world. The counter argument by folks I respect is that it’s easier said than done. I’ve never believed it’s as tough as some people make it out to be. Put another way, the big boys of tech (Amazon, IBM, Microsoft, Oracle) build very complex systems that just work. They have the advantage of not needing to build on legacy technology, but that’s just an excuse for the airlines.
When there have been outages in the past, the airlines avoided widespread criticism by the analysts that grill them on the quarterly earnings calls. And, frankly, that’s probably the single biggest reason they still use those legacy systems. If the folks that help drive their stock price up and down aren’t concerned, who else is going to push the airlines to fix this problem? Customers are filling up planes for Delta and United again this week, so there’s no big push there.
The airlines are making a strategic decision that it’s cheaper to compensate customers when a problem happens rather than make sure one doesn’t. United Airlines reported over $2 billion (with a B) in profit for 2016. Delta reported almost that much for their 3rd quarter of 2016.
Yes, there are airplanes to buy and maintain. There are plenty of capital investment projects. They’ll need to pay their employees more in the future, and they need to preserve cash for the lean years.
But, it’s 2017. We’re way beyond the turn of the century. This technology that was old well before then. My recollection was that Southwest picked up an entire extra plane’s worth of scheduling when they switched from an old spreadsheet to a computerized scheduling system. More efficient systems can make a world of difference.
Millions of dollars were wasted during the most recent outages. People missed meetings, time with loved ones, and vacations. The airlines paid out to customers that were inconvenienced. Nobody wins when problems like this happen. But, they don’t have to happen.
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