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New IT System For AA

American Airlines to replace Sabre with new IT system

Aug 26, 2009

AMR Corp., the parent of American Airlines, said Wednesday that it plans to scrap its computer system for a next-generation version centered around passenger data and built by Hewlett Packard Co.

The new technology will be rolled out over the next four years and will largely replace Sabre, the 50-year-old computer platform at the heart of American's operations.

That early computer reservation system, created by Texas-based American and New York-based IBM Corp. in the 1950s, was largely adopted ¬Ė or copied ¬Ė by the rest of the airline industry and eventually spun off into a separate company.

"This is big news," said Henry Harteveldt, travel analyst with Forrester Research Inc. "What American is doing is the equivalent of a brain transplant, heart transplant and a lot of plastic surgery, all simultaneously."

But changing information technology at airlines rarely goes smoothly, given the size and complexity of their operations, noted aviation consultant Robert Mann.

Passengers have suffered myriad problems this decade, from kiosk meltdowns to lost reservations, as airlines tried to upgrade or install new technology.

Adding to the challenge for American: it plans to create a brand-new system with HP rather than install technology from the dozen or so vendors that cater to the airline industry.

Air Canada earlier this month announced that it was suspending work on Polaris, a new reservation system developed by ITA Software that was running about two years behind schedule.

"The track record on large-scale airline systems developed by so-called 'next-gen' vendors has been pretty dismal," Mann said. "It's been late and not-so-great."

American officials are convinced they will change how airlines are run by employing state-of-the-art hardware and software.

The nation's second-largest carrier, like its peers, has separate databases for reservations, frequent-flier programs, fares and operations, Harteveldt said.

But American plans to create a single database for all of its operations, built around passenger information rather than ticket transactions. Doing so will minimize systems crashes. The carrier will be able to use travel patterns as it tailors its marketing to individual customers, or to quickly identify service break-downs that they identify.

To control costs and minimize the shock to its system, American plans to tackle the overhaul in piecemeal fashion, installing one "module" at a time over a four-year stretch, Monte Ford, American's chief information officer told reporters during a conference call Wednesday.

Many of the breakthroughs of the news system -- faster processing speeds, greater flexibility and reliability -- would not be noticeable to customers.

But the new platform would allow American to use social networking tools to help workers coping with massive delays at an airport share information with each other, and with passengers, Ford said.

Ford wouldn't discuss how much American is spending on its new computer system, but analysts think its expenditures could easily run into the hundreds of millions of dollars.

"We'll certainly be looking at how capital expenditures change to get some insight into this," Harteveldt said. "But American would not be investing in this if it were not providing tangible benefits to the rest of the company."

American Airlines to replace Sabre with new IT system

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