American’s Chief Operating Officer said that American and US Airways wouldn’t combine until late 2015.
American’s Chairman and CEO gave an interview where he said that the two frequent flyer programs would combine in the first half of 2015.
At first I thought these two statements were in conflict. Perhaps Parker was misquoted, or misspoke, or a change in course came about just in the past two weeks.
But someone at American pointed out to me that Isom was talking about the passenger service system and Parker was talking about the frequent flyer programs.
Should that even matter?
For passenger service system, think the reservation system, the website, basically combining the customer-facing systems. Reservations get combined. They operate effectively as a single airline (it would be possible to combine passenger service systems without having a single operating certificate and ‘being’ one airline, you would have “American Airlines Flight XXX Operated by US Airways“).
Generally when airlines merge they have a ‘big bang’. Call it “Customer Day One” or “the Apocalypse.”
Everything combines at one moment. They wargame it for weeks. They run tests transitioning all of the data — frequent flyer accounts, reservations, everything. One reservation system gets shut down, and the surviving system is what everyone works off of. And invariably it’s a disaster.
Well, not invariably. It was pretty bad when US Airways and America West combined. They told everyone lines would be long at the airport, so check in online. But the website didn’t work.
Much worse was United-Continental, where reservations went missing, miles went missing (and others found themselves with hundreds of thousands of extra miles). Need help because of the disaster? Hold times stretched on for hours.
Delta-Northwest wasn’t without its glitches but went much more smoothly.
I confirmed the timeline for the frequent flyer program integration with American. Here’s what I was told:
Doug’s interview is accurate… We expect to have a combined FFP sometime in the first half of 2015. That hasn’t changed. But, this is the first time Doug has said anything public about it.
Reconciling the two timelines suggests American could be charting its own path: a phased-in integration rather than a single cutover.
Combine the frequent flyer programs. Then months later combine the reservation systems.
On the one hand that seems strange, like it would entail a ton of extra work. US Airways’ systems would have to learn how to upgrade American frequent flyers.. since that’s all there would be. I wouldn’t think they’d be investing in reprogramming US Airways legacy systems unless it was absolutely necessary, the timeframe to get any sort of return on the program investment would be really short.
It might be a less risky strategy to go piece-by-piece but it may also be a more expensive strategy. It could be they view that as worth it.
And since we don’t have precise dates announced by American for the integration of frequent flyer program, they haven’t made a commitment, it’s difficult to know. But reading the statements of the CEO and the COO we would get a different picture of what could happen… a new, unexpected (relative to US Airways/America West, Delta/Northwest, United/Continental) approach of a phased-in integration. Frequent flyer program first, reservation system later.
One imagines though — given that the airline hasn’t announced its timeline and that we’re talking about as much as 10 months away — that it depends on how the work progresses. With the broad ranges we’re being given, this all could slip.
- First half of 2015 could be second half of 2015.
- Second half of 2015 could slip to the end of the first quarter of 2016.
But it’s still a fascinating clue as to how they could be thinking differently about the integration. Don’t do it all at once. Combine frequent flyer programs, which is great for flyers, we won’t have to wait to combine miles and elites will get full benefits across both airliens more quickly. Then combine reservation systems later.
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