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Southwest Seeks to Avoid Pitfalls in Systems Switchover

Southwest Airlines Co. (LUV) isn’t taking any chances on disruptions during its switch to a new domestic reservation system.

As Southwest transitions to Amadeus IT Holding SA, it has the option to continue working with its current provider, Sabre Corp., beyond the Dec. 31, 2016, end of its contract, Randy Sloan, the airline’s chief information officer, said in an interview today.

By having backup support during the handover, Southwest hopes to avoid disruptions that have hit other airlines during changes involving computerized reservation systems. Such hiccups struck United Continental Holdings Inc. (UAL) in 2012 and US Airways Group Inc. in 2007 as both moved merger partners to one provider.

“Some airlines have had to do knife-edge cutovers,” Sloan said. “I’m not a fan of those types of migrations, so we’ve worked very hard to create a plan with as low a risk option as you can get when implementing a major piece of technology like this.”

The Amadeus system will give Southwest the ability to add baggage or other fees, enter marketing agreements with other carriers and begin overnight flights should it decide to do so. In the past, Southwest has had to build such technology once it decided to make a change, delaying implementation. Unlike competitors, Southwest doesn’t charge for a first or second checked bag or to change a reservation.

Southwest, which carries the most passengers on U.S. routes, declined to say when Amadeus would take over full operation of the domestic system or how long it could extend Sabre’s assistance.

Three Systems

American Airlines Group Inc. said in January it would use Sabre for its single reservation system after combining with US Airways. American was already using Sabre’s platform before the carriers’ December merger, and has said it hopes that will minimize any disruptions when its two systems merge.

Dallas-based Southwest operates now with three reservation systems, with Sabre handling domestic operations and Accenture Plc’s Navitaire unit used for flights by AirTran, which Southwest acquired in 2011. The airline in January began selling international itineraries using Amadeus, and those flights will begin on July 1.

Navitaire will stop operating in December after all AirTran flights have moved to Southwest.

Southwest worked with Amadeus for two years to create the reservation system for the airline’s first international flights and “that work has gone incredibly well,” Sloan said.

Amadeus’s work to connect all three of the airline’s existing reservation systems “gives us a unique position a lot of other airlines have not had,” he said. It should allow Southwest to gradually shift more volume over to the Amadeus system instead of making a one-time switch.

Southwest isn’t disclosing terms of the contract with Madrid-based Amadeus, although Sloan said it provides “both cost efficiencies as well as incremental customer service and value opportunities for us.”

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz, John Lear

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