usairways
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USAirways. Joe Beery Sr Vice President and Chief Information Officer. For the Record. Yes your aircraft is very safe you have nothing to worry about I do not control where we fly to, I can not get another flight into your city or more First Class Seats I did not cancel your flight - PowerPoint PPT PresentationTRANSCRIPT
USAirways
Joe BeerySr Vice President and Chief Information
Officer
For the Record• Yes your aircraft is very safe you have nothing
to worry about
• I do not control where we fly to, I can not get another flight into your city or more First Class Seats
• I did not cancel your flight
• I did not lose your luggage and I can not find your luggage
USAirways Who We Are
PWM
OAJ
MGW
LEB
AOO
ISP
RKD
ABE
ALB
AVL
AVP
BTV
BUF
CAECHA
CHS
CLT
CMH
CRW
ELMERI
FAY
GSO
GSP
HPN
ILM
ITH
LGA
LWB
MDT
MHT
ORF
PVD
RICROA
ROCSYR
TRITYS
OGSMSS
HVNERI
ACKMVY
ART
BFDFKL
JHW
LBE
DUJJST
PQI
HYA
AUG BHB
PHF
SBY
CHOCVG SHD
HGR
HTS
LYH
CKBLNS
FLO
EWNPGV
AHN
AGS
BLF
BKW
HHH
SWFBGM
IPT
SCE
GCK
DDC
HYS
GBD
MHK
ALBBUF
CAE
CHS
CMH
LGA
MDT
ORF
PVD
YYZ
SLN
SAV
TLH
CAKCMH
DAY
YUL
CAK
CHA
DAY
HSV
TYS
YUL
CAK
YOW
LIT
SCE
BGR
JAN
GNV
MGM
MOB
SDF
XNA
GRR
JAX
LEX
PNS
EYW
LAS
GCM
BHM
STTSXM
NAS
SDQ
BDA
BNA
JAX
MBJ
MSY
RSW
SJU
SRQ
AUA
FPO
BGI
CZM
BZE
PLSPUJ
SJOSAL
GUA
PTYKIN
LGW
FCO
MAN
CDGFRA
MADMUC
AMS
GLA
YYC
YVR
SNAPSP
YUM
OGG
SJD
PVR
SAN
LIH
MZT
SJC
HNL
SFO
HII
HMO
GYMGDL
AUS
BOI
MEXCUN
ORD
ATL
BDL
BOS
BWI
CLE
CMH
DCADEN
DFW
DTW
EWR
FLL
IAD
IAH
IND
LAS
LAX
MCI
MCO
MEM
MIA
MKE
MSP
PBI
PHL
PHX
PIT
RDU
SEA
TPA
STL
ABQ
ANC
ASEBFL
BIL
BUR
CLD
COSDRO
DSM
ELP
EUG
FAT
FCA
FLG FMN
GEG
GJT
ICT
IGM PRC
JFK
RNO
SBA
SBP
SLC
SMF
TUS
LGB
MFR
MRY
OAK
OMA
ONT
PDX
SAT
KOA
TEX
YEG
32 Countries/Territories (Europe, Mexico and Caribbean)
223 Total Destinations
The Merger
A Tale of Two Cities
(East and West)
BackgroundUS Airways (East)
– Outsourced to Sabre/EDS since 1998 prior to Y2K – Similar to American Airlines– Limited new development, no technology refresh– Legacy systems and infrastructure – Survived 2 Bankruptcies
America West (West)– EDS hosted Reservations System– Internal development in most areas– Recent upgrades were Tier 1 providers– Modern network and infrastructure in the field
Integration Strategy
• Migrate to lower cost internally supported systems • (In sourcing)• Scale and integrate current applications• Add functionality where needed (international)
• Leverage internally developed distributed applications• Americawest.com will be re-branded to USAirways.com• Americawest kiosks will be re-branded • FlightFund system will be renamed to Dividend Miles
Achieve synergy savings $100 Million
Challenges
• Run 2 airlines daily operations
• Move the from an outsourced model to a hosted model (new EDS contracts)
• Ramp up staffing in the IT department
• Integrate the systems and upgrade the infrastructure
Infrastructure
• Convert from a legacy multi protocol environment to a modern IP network.– $45M Airport upgrades
• 10,000 new desktops• All new switches, hubs and routers• 800 new kiosks
– Voice upgrades• Call center and campus switching• 2nd Datacenter upgrades
Reservations System Specifications
• US Airways operated with approximately 3M Passenger Name Records and 5M e-tickets.
• America West operated with approximately 2M Passenger Name Records and 3M e-tickets.
• Cut Over in 8 hours
Airline Operations
• Phased approach based on Fleet type, migration happened over time.
• Massive data migration – Aircraft parts– History
• Migrated the dispatch center over night
• Currently building a new command center
IT systems were merged in 25 months achieving a single
operating certificate.
Sept 2005 – Oct 2007
• A “needy” business group is a good indication that they are very engaged and consequently well prepared for cutover.
• Small program team was able to maintain tight control over the entire program, managing changes well with a high quality of communication.
• Dress rehearsals were invaluable in uncovering issues with timing, and technology.
• Migrations are so complex, it’s best to have it in-house. There is an important difference between high level working knowledge and a deep understanding of how things actually work.
Lessons Learned –What Worked Well
Lessons Learned – What Didn’t Work Well
Training Training Training • Insufficient process testing by airport team
did not reveal Agent training shortcomings prior to cutover.
• Still working on the labor contracts
IT Strategy Today and Going Forward
IT Investment ModelIT Market Place is broken up into 4 major sectors:
Hosting
Buy
Build
Out Source
Sabre EDS
AWA
USUS
New
Our Goal is to move
more to the middle
Build vs. Buy
Build Criteria:
1. Significant competitive advantage
2. Speed of execution is desirable and the environment is very dynamic
3. No provider exists in the market place
Buy Criteria:
1. Tier 1 provider
2. Strong market position
3. Solid technology with a good investment plan
Innovation
Leading
Edge
First
Follower
Late
Adopter
Bleeding
Edge
Innovation is based on desired risk/cost and ROI.
Cost and Risk
$$$
Return on Investment
(ROI)
We will be a good “First Follower”
US
New
Internet and AirportsBuild
• Self Service Kiosks and Gate Readers
• Internet Distribution – USAirways.com– USAirwaysVacations.com
Employee and Back Office
Continued implementation of the ORACLE Suite.- Human Capital Management - Payroll- Purchasing - Fixed Assets - I-Learning- I-Recruiting - Cash Mgmt - Accts Rec - Contract Mgmt - Budget and Forecasting
• Enable self service options for Human Resource Functions.
• Enable all employee travel benefits on-line including family members.
• Provide on-line training for Airport and Reservations.• Standard industry proven package
Buy
Buy
Longer Term 3 to 5 Years• We are going to have to upgrade the
reservations system. There are other partners that may have options in 3-5 years, we are currently evaluating all options.
• Service Oriented Architecture (SOA) will enable more seamless application integration at much lower costs (Microsoft, ORACLE).
• All applications will have to operate in a handheld mobile configuration (In-flight entertainment, reservations, customer/employee notifications).
Where are we Today
The Industry
• Unprecedented financial crisis because of fuel (again)
• Consolidation continues – America West – USAirways (Done)– USAirways - Delta (Almost)– Delta – Northwest (Working)– USAirways – United (Almost)
2008: The Price of Fuel• Fuel expense will cost the industry an additional $18 billion in 2008
versus 2007 and US Airways nearly $2 billion
WTI ($/bbl)
Historical Industry Fuel Prices
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E
$21 $14 $19 $30 $26 $26 $31 $41 $57 $66 $72 $118
GC
Je
t ($
/ga
l)
Gulf Coast Jet
Fuel Expense Mainline Passenger
$70 $65$55
$65$84
$118
$150 $151
$299
2000 2001 2002 2003 2004 2005 2006 2007 Current
• US Airways’ average fuel expense per round trip mainline passenger will average approximately $300 in 2008.
Fuel Prices Impacting Entire Industry
Industry Response
• Significant Capacity Reductions– All major airlines reducing U.S. capacity– Domestic Available Seat Miles (ASM) expected to
be down 9% in 4Q08 and down 9% in 2009 vs. 2008
• New Revenue Streams and Cost Reductions– Baggage fees (First Bag, Second Bag, Third Bag)– Choice seating– Removal of in-flight entertainment system – Removal of ovens
Industry Response
• Introducing a new in-flight beverage purchase program.
• Amending the airline’s Dividend Miles frequent flyer program.
These are aggressive responses that will have a material impact on future industry
financial performance
Thank You