Southwest Airlines migrates to new reservation system

May 09, 2017 No Comments by

Southwest Airlines migrated to a new reservations system on Tuesday, 08 May 2017. America’s original low-cost carrier will use the Amadeus Altéa platform to perform its reservation and check-in functions. This system is used by major airlines such as QANTAS, British Airways, Cathay Pacific and Singapore Airlines. The Madrid-based Amadeus in fact has over 100 airlines using their system.

The move which is believed to have cost US$500million involved months of preparation and training of over 20,000 Southwest staff. Southwest has dubbed their new system OneRes. Prior to switching to Amadeus, Southwest used its own in-house system developed by Sabra Corp. The 30 year old system was by now showing its age and reduced functionality to Southwest.

Old system limitations

Southwest’s limitations with the old system included:

-        Inability to offer “red-eye” flights; Technological constraints with the system meant Southwest was unable to offer overnight services even though in June 2012 the pilots agreed to “red-eye” services. Southwest will now be able to offer overnight services from the West Coast to places like Baltimore, Chicago and Atlanta which are large Southwest bases

-        Frequency limitations; Southwest schedules under the old system were from Sunday through to Friday with a different schedule operating on Saturdays. The airline will now be able to adjust schedules accordingly to better reflect demand, particularly on Tuesdays and Wednesdays where demand is traditionally lower.

-        Reduced inventory management and fare pricing functions; Southwest was unable to provide dynamic pricing between city pairs with intermediate points. Controlling the inventory across the network not just in isolated city pairs provides a better yield management system for Southwest.

-        Inability to reprotect passengers during irregular operations; the old system was unable to rebook passengers in bulk onto other services during times of irregular flight operations

 

New opportunities with Amadeus for Southwest – ancillary revenues

Using the Amadeus system Southwest will be able to overcome their old system’s limitations whilst taking advantage opportunities given the greater functionality benefits. Southwest will be able to offer connectivity across their network, seat assignment, the ability for greater inter-line partnerships with other carriers, code-sharing and greater use of its loyalty program. Such characteristics have long been attributed with legacy carriers with LCCs normally unable to offer them given their system limitations as well as keeping costs down.

The disparity between low cost and legacy carriers grows increasingly smaller. LCCs adopt attributes whilst legacies are more than ever adopting LCC characteristics as means of lowering costs and increasing revenue. The adoption of a suitable airline system commensurate with the airlines’ requirements is a key to meeting their financial objectives.

Ancillary revenues is one area of potential growth and one where airlines are making significant profits. Southwest is one of the few remaining carriers that does not charge for checked baggage or “change fees” for changing reservations. At the company’s annual investor day last year on 23 June 2016, CEO Gary Kelly stated that there was no change to this policy. “We have no thought of charging for bags… We’ll have capabilities in the future that would allow us to assign seats. Right now, we don’t have any thought that that’s anything that we want to do. We can do a lot of good things without tinkering with the brand… “After 30 years, we’re going to have an up-to-date reservation system that will have much more robust capabilities for us to more tactically contemplate making changes to our business model.”

AHB Original Articles, Airline News, Airline Resource Management, Airline Revenue, British Airways, Cathay Pacific, QANTAS, Southwest

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The person behind Airline Hub Buzz is a veteran having worked across a broad range of organisations in the industry. AHB's formal qualifications included a Bachelor of Business (Honours) (majors in Marketing, Management and Tourism Management) as well as a Master of Science and Technology (Aviation Management)...PhD in an Aviation related field soon.
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