Alaska Airlines' merger integration for technology has been nearly flawless. That's great news, but the company has been so focused on it that it hasn't been doing much digital innovation. Let's see if that changes soon.
When Charu Jain joined Alaska Airlines in 2017 as chief information officer a couple of months after it acquired Virgin America, she knew was in for a challenge. Each airline had hundreds of technological platforms for everything from crew scheduling to reservations to maintenance, and all would need to come together.
Jain had been through this before, at United Airlines, where she was a senior managing director of operations technology and technology integration during its merger with Continental Airlines. While at United, she learned a valuable lesson about melding airline technology: It doesn’t have to be perfect, but it must work.
“Technology is one of two things that can really make or break a merger,” she said Thursday at the Skift Tech Forum in San Francisco. “Success is: Don’t end up in the news. That’s what we go for.”
By most accounts, Alaska succeeded. The airline has had some hiccups merging corporate cultures — former Virgin America employees sometimes complain about Alaska’s staid, risk-free approach — but it has had few of the technological snafus that have plagued other airline mergers.
The media often picks up on technology troubles. When United struggled in 2012 when it merged two reservations systems, with travelers reporting problems with the airline’s website and airport kiosks, reporters wrote stories questioning the airline’s approach. But journalists hardly noticed Alaska’s April 2018 system cutover, and when they did, they were complimentary.
Most travelers probably don’t understand how complicated it is to combine the technological functions of two airlines.
Jain said Alaska had about 450 systems running its front-and back-end operations, while Virgin America had about 250. The combined company also had, for awhile, seven different data centers and two different networks.
One of her first tasks, she said, was deciding the order of integration.
“When you start thinking about bringing it together, one of the learnings has been, how do you create this master plan of what should go first, second and third?” she said.
In this case, she said, the airline prioritized what it saw as “anchors,” or systems that were customer-facing or vital to operations. With those projects finished, Alaska is focusing on integrating the technology its maintenance and engineering teams use.
“As soon as you announce the merger, everyone in the company wants to move ahead,” Jain said. “You can only bring your business processes together when you bring the underlying technology together. It’s like you’re at a horse race. Everyone is ready to go out of the gate, but the track hasn’t even been laid yet.”
Jain, who worked on American Airlines’ merger integration as a consultant for IBM Global Business Services, said merging airlines sometimes run the same systems, but even then, combining them is a challenge. For example, Alaska and Virgin America used a passenger reservations system from Sabre, but both had customized it so much that they were essentially running different platforms.
“In all my mergers, what I have found is that there is not that much [commonalty] even though we are all trying to do the same thing,” she said.
Future Tech Plan
One problem with airline mergers is that IT teams become so focused on integration that they move slower on everything else.
To some extent, that has happened at Alaska, which probably has been not embraced digitalization or even fast onboard WiFi with the same gusto as its competitors. (Alaska did recently begin adding better internet to its planes.)
Jain suggested the airline will return to innovating soon. She said Alaska is working on a platform that would allow customers to use their tablets and and phones to place orders for food and drinks during the flight. Virgin America let customers place orders on their seat-back screens, and flight attendants would deliver it, but that functionality disappeared as Alaska removed screens from planes to save costs and weight.
“That is one thing we have on our roadmap to do through the mobile app,” she said.
Alaska has other priorities, too. Jain said it wants to become more nimble in how it interacts with customers, so it can remove friction and provide a “hassle-free” experience. Alaska would also like improve its customer interaction so it is a “all seamless and continuous,” rather than disjointed.
“So it’s not like I’m a guest at the airport, and I’m different on the flight, and I’m different when I’m on digital or calling the call center,” she said. “Wherever you interact with us, you should get that same consistent experience and it’s relevant, so we know you and we get you.”
More generally, she said Alaska wants to treat its customers as other consumer brands treat theirs.
“We really need to understand everything from the guest point of view,” she said. “And their point of view is actually being influenced by a broader ecosystem. Their retail expectations are influenced by Amazon and it is very easy to transact. They want their time at the airport to be like sitting at a Starbucks or maybe shopping at a Whole Foods. We need to understand from other industries.”
Photo credit: Charu Jain, chief information officer of Alaska Airlines, spoke Thursday with Skift's Madu Unnikrishnan at the Skift Tech Forum. She has been focused on merger integration issues. Skift