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From build to buy: American Airlines changes modernization course midflight

Robert L. Mitchell and Johanna Ambrosio | Jan. 3, 2013
American Airlines was well into a simultaneous revamp of its Passenger Services System (PSS) and Flight Operating System (FOS), its two most mission-critical families of applications, when the airline changed course last January.

American would say only that the buy versus build decision was not made at any one moment in time but was made over time as they evaluated different factors. "Thus, we made announcements and decisions about Jetstream as each decision point was reached," a PR spokesperson said.

American fell into the trap of thinking that it had to build from scratch to get everything it wanted, says Harteveldt. "An airline the size of American will certainly need a lot of tailoring, but I was never convinced that they needed a totally custom-developed product." Changing to a buy strategy was a good move, he adds.

"How you manage an itinerary, that's commodity stuff," Henry explains. "But there's a competitive advantage in implementing different ways of checking in people. We want the flexibility to have [the] ability to modify [that]," he says. American also wants the ability to unbundle fares and offer new options, and has developed a merchandizing application that lets it offer such options as priority boarding.

But those functions are all still tied back to the PSS on the mainframe. Plugging those applications into Jetstream's new core transaction engine will offer greater back-end flexibility, the airline's IT executives hope.

Maya Leibman's focus

CIO Maya Leibman says the goal of American's IT modernization effort is to streamline the customer experience from beginning to end in an effort to increase customer loyalty and revenue. In leading the charge, Leibman says she is personally focused on three areas:

"Collaboration across my technology organization, with our internal business partners and with our external partners and vendors."

Transformation. "We are looking at everything we're doing and determining if there's a better, smarter way to be doing it."

Speed to market. "We need to be more responsive, nimble and fast in order to meet all of the challenges we have."

Now the question is which off-the-shelf software to choose. American is in the process of determining which product might be best, says Henry. Options include a new offering from Sabre (a former American Airlines division long since spun off); Amadeus, which makes software used by many European carriers; and ITA Software by Google.

For now, the PSS continues to run on the mainframe. American has put more modern user interface "wrappers" around its green-screen applications, but those applications are, for now, still locked into the Sabre system. "We need to get deeper into the stack and change the core engine and decouple the rules so we can change them rapidly," by leveraging American's SOA, Henry says. "We want to open up the flood of information that's locked into that system."

Ultimately, Jetstream will help American bring in new revenue through by enabling the airline to offer a mix-and-match menu of different options -- Leibman's main focus -- but it will also deliver cost savings by allowing passengers to do more things for themselves, thereby reducing the need for agent staffing at airports, says Harteveldt.


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