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The Airline Industry’s Problem with Absolutely Ancient IT

Wendover Productions・20 minutes read

Southwest Airlines faced significant issues due to Winter Storm Elliot, leading to a nationwide cancellation of 5,700 flights before Christmas and an estimated $825 million loss in the final ten days of the year. The airline's legacy and IT system limitations, particularly with SkySolver, contributed to the crisis, resulting in cancellations closer to departure times and requiring manual intervention.

Insights

  • Southwest Airlines faced a significant crisis during Winter Storm Elliot, resulting in the nationwide cancellation of 5,700 flights and an estimated loss of $825 million in the final days of the year, highlighting the impact of operational decisions during adverse weather conditions.
  • The limitations of Southwest's IT system, especially with the SkySolver system, played a crucial role in the airline's meltdown, leading to manual interventions, volunteer staff training, and last-minute cancellations closer to departure times, underscoring the importance of robust technological infrastructure in managing flight disruptions effectively.

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Recent questions

  • How did Southwest Airlines handle Winter Storm Elliot?

    Southwest Airlines management met before Christmas to plan for Winter Storm Elliot. They began canceling flights in advance, informing the pilots' union and directing affected customers to check for disruptions. Despite canceling hundreds of flights early, the decision backfired, leading to a nationwide cancellation of 5,700 flights before Christmas and nearly 17,000 flights in total.

  • What caused Southwest Airlines' massive flight cancellations?

    Southwest Airlines faced significant issues due to Winter Storm Elliot, resulting in a nationwide cancellation of 5,700 flights before Christmas and nearly 17,000 flights in total. The airline's legacy point-to-point model became a liability during delays or cancellations, exacerbated by IT system limitations with SkySolver, leading to cancellations occurring closer to departure times.

  • How did Southwest Airlines manage flight schedule changes during Winter Storm Elliot?

    Southwest Airlines utilized a GE Aeronautics system called SkySolver to manage flight schedule changes, cancellations, and crew assignments during Winter Storm Elliot. However, the IT system limitations, particularly with SkySolver, led to a massive crisis with cancellations occurring closer to departure times, requiring manual intervention and volunteer staff training.

  • What challenges did Southwest Airlines face during Winter Storm Elliot?

    Southwest Airlines faced challenges during Winter Storm Elliot, leading to a nationwide cancellation of 5,700 flights before Christmas and nearly 17,000 flights in total. The airline's legacy point-to-point model, IT system limitations with SkySolver, and the lack of information on flight delays or unconventional ticketing options in the GDS contributed to the crisis.

  • How did Southwest Airlines' direct booking strategy impact the industry?

    Southwest Airlines' direct booking strategy increased revenue through upsells and avoided GDS fees, impacting industry interoperability. This strategy, while beneficial for revenue, also highlighted the challenges faced by airlines in integrating more complex backend communication standards like the NDC, with only a fraction of airlines fully integrating it.

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Summary

00:00

Southwest Airlines Winter Storm Cancellation Crisis

  • Southwest Airlines management met on the Monday before Christmas to plan for Winter Storm Elliot.
  • The airline began canceling flights in advance of the storm after internal discussions and informing the pilots' union.
  • Customers at affected airports were directed to check if their flights were disrupted, with the list of impacted airports expanding.
  • Southwest proceeded to cancel hundreds of flights as the winter storm intensified.
  • The decision to cancel flights early to allow customers to adjust plans and crews to reposition proved to be a mistake.
  • Southwest faced significant issues due to the storm, leading to a nationwide cancellation of 5,700 flights before Christmas.
  • Southwest ultimately canceled nearly 17,000 flights and lost an estimated $825 million in the final ten days of the year.
  • The airline's meltdown was attributed to its legacy, particularly its point-to-point model that became a liability during delays or cancellations.
  • Southwest utilized a GE Aeronautics system called SkySolver to manage flight schedule changes, cancellations, and crew assignments during irregular operations.
  • Southwest's IT system limitations, particularly with SkySolver, led to a massive crisis with cancellations occurring closer to departure times, requiring manual intervention and volunteer staff training.

12:15

Maximizing Revenue Through GDS Strategies

  • At 1:36 and 3:55, seats are oversold, leaving no availability for a stranded passenger.
  • The GDS indicates the passenger can't reach Zurich until the next day, but experienced agents can find alternative routes.
  • United also flies to John Wayne Airport, allowing passengers to reach LAX and continue their journey to Switzerland.
  • Agents can individually book seats for each leg and string them together into an itinerary in the PNR.
  • The GDS lacks information on flight delays or unconventional ticketing options, requiring manual intervention.
  • Air New Zealand's Skycouch seats are not properly displayed on the GDS, leading to potential revenue loss.
  • The NDC standard allows for more complex backend communication, but only a fraction of airlines have fully integrated it.
  • Southwest's direct booking strategy increases revenue through upsells and avoids GDS fees, impacting industry interoperability.
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