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More Airline Outages Seen As Carriers Grapple With Aging Technology (reuters.com)
An anonymous reader writes: Airlines will likely suffer more disruptions like the one that grounded about 2,000 Delta flights this week because major carriers have not invested enough to overhaul reservations systems based on technology dating to the 1960s, airline industry and technology experts told Reuters. Airlines have spent heavily to introduce new features such as automated check-in kiosks, real-time luggage tracking and slick mobile apps. But they have avoided the steep cost of rebuilding their reservations systems from the ground up, former airline executives said. Scott Nason, former chief information officer at American Airlines Group Inc, said long-term investments in computer technology were a tough sell when he worked there. "Most airlines were on the verge of going out of business for many years, so investment of any kind had to have short pay-back periods," said Nason, who left American in 2009 and is now an independent consultant. The reservations systems of the biggest carriers mostly run on a specialized IBM operating system known as Transaction Processing Facility, or TPF. It was designed in the 1960s to process large numbers of transactions quickly and is still updated by IBM, which did a major rewrite of the operating system about a decade ago.
Southwest airlines reservation system is run off a IBM System/360 mainframe they inherited from Pan-Am. I'd be surprised if there was another functioning unit anywhere else in the word. You could probably emulate the whole damn thing on cell phone.
The problem is that if all of your competitors are willing to go bankrupt every 15 years its' really hard to not go bankrupt before they do. It doesn't do you any good if they'll be going bankrupt in 8 years if you go bankrupt next year because you're 10% more expensive.
We see that in my industry all the time. Lots of people undercutting sustainable rates. They inevitably go bankrupt but if you don't match prices you'll go bankrupt waiting for them to go first. And since they're offering products at under cost they can also appeal to investors with fat grosses and rapid growth.
Imagine for instance you were trying to take on Amazon. Amazon hasn't really ever made money. But they can point to their rapid growth for long term investors. If you're an airline you probably won't see growth and it's hard to say "look we're losing a lot of money now but in 8 years when our competitors hit a hard time we'll make some money then until someone else comes along and promises to do what we do but cheaper and never go out of business." You see that with Jetblue and Virgin America. Jump into the industry with lots of investment. Offer a product at razor thin margins and capture a ton of market. But their business plan isn't tested to survive a big recession. So it's a gamble. They'll either do great or it'll reveal they were built on sand.
When your competitors are playing with fire it means they capture all of the revenue when times are good leaving you nothing to save for the "bad times" and then you only prosper when the market is crappy anyway and they can write off their debt in bankruptcy. It's a lose lose.
No one credible would count duplicate equipment in the same data center to be any kind of DR plan at all. That's like confusing RAID with backup. And just like you don't have a backup unless you've tested it, you don't have a DR plan unless you've tested it.
But a "disaster plan" needn't be limited to IT in any way. Air France had some sort of computing disaster recently, a similarly total outage, but they completed all their scheduled flights (not on schedule, but still). They had a disaster plan involving everyone behind a counter at an airport on the phone to a massive call center, where everything was verified "manually" from offline backup systems (and possibly print-outs). "Is Joe Slashdotter booked for flight 123?" "Give me a minute - yup, let him on the plane." Low tech, but it worked.
Socialism: a lie told by totalitarians and believed by fools.
Were the airlines really in that tough a shape for that long of a period of time?
If they have only recently returned to profitability and actually experienced extended times of economic uncertainty, how do you explain Boeing outperforming the S&P 500 and gaining 8000% in value since 1978? Overseas sales explain some of it, but not all of it and an extended depression in American airline business you would associate with some decline in Boeing's business, but it's been continuous growth.
And airports and crowds? Airports I've flown through for 20 years are only bigger and busier than they ever were. I don't remember a time when I thought the airport was too big or empty, either, it's been steady if not increasingly busier and more crowded. Airports all seem to expand, not contract.
Overall, the aviation sector seems to have done nothing but grown. So how is it exactly that the airlines were truly losing money? I don't doubt they reported low stock prices or reported lower profits on paper, I just don't know that the industry truly shrank and lost money.
I also remember schemes where airlines went through leveraged buy-outs and the new owners sold off air fleets and then leased them back to the airlines and had them make huge payments to consulting companies owned by the new buyers. I think the airlines got bled dry and then had to fight acquire less parasitic management focused on the business rather than just sucking the capital out of them.