Top executives at United Continental Holdings Inc. usually don’t field questions about 1980s Matthew Broderick films during conference calls to discuss the airline’s quarterly profits.
But they did during a recent earnings call.
“I can’t help but think of that scene from ‘War Games,’ where they couldn’t shut the computer off,” said Jamie Baker, a stock analyst from JPMorgan Chase, referencing the 1983 movie about a military supercomputer that takes over and nearly starts a nuclear war. “My question is, what happens if the cutover doesn’t go as planned?”
The cutover.
United Continental’s cutover to a new computer system is just weeks away, slated for the first week of March, although the airline won’t give an exact date. The system will be the digital backbone of the airline’s worldwide network, handling everything from passenger information and reservations to airfares and flight schedules. The move to a combined system will help customers finally see United and Continental, which merged in 2010, as a single airline.
But the switch is a risky undertaking and a monumental one for the Chicago-based airline, which spent more than a half-billion dollars on integration last year. The cutover alone has involved thousands of United employees.
On the conference call, United executives chuckled at the movie reference in the analyst’s question. But they are dead serious about the cutover.
“We’ve had four full-scale dress rehearsals, all the data transfers, and everything is appropriate,” United chief executive Jeff Smisek said. “We are exceedingly well-prepared for it.”
But other airlines, despite their preparations, have had embarrassing episodes with similar computer conversions that created major hassles for air travelers.
“That’s always a risky endeavor,” Seth Kaplan, managing partner of Airline Weekly, said of airline computer system changes. “We’ve seen over the past several years as airlines have migrated their reservation systems, some have done it rather smoothly and some have not and had real operational messes and a lot of bad headlines.”
Virgin America switched to a new reservation system Oct. 28. It was plagued for weeks with glitches on its website and at its airport kiosks. Customers were outraged when they couldn’t change or cancel flights, choose seats or access their frequent-flier accounts.
Widespread glitches happened in 2007 when US Airways merged with America West and switched computer systems. On the weekend of the changeover, self-service kiosks crashed in several airports across the country, resulting in days of long lines at check-in counters and hundreds of delayed flights. Passengers also couldn’t check in online.
Surely mindful of those problems, United’s preparation hasn’t stopped with dry runs.
“I’m confident this will go as planned, but … being prudent, we also have scenarios in case we have some unforeseen issues,” Smisek said. If something goes wrong, the airline can roll back the cut over or postpone it, he said. “We’ve been pretty thoughtful, careful and conservative in this.”
