BA's System Overload
Core airline commercial systems are beautiful in a way. When a passenger makes a booking or buys a ticket the Global Distribution System (GDS) makes sure that they are quoted the right price and the airline reserves their place. A Computer Reservation System (CRS) holds the booking until three days before travel at which time the airport opens a flight to make it ready for departure in their Departure Control System (DCS). Both systems together are known as the Passenger Service System (PSS).
Accepting a passenger for travel requires a ticket check and then boarding cards and bag tags are issued. Once used, the ticket is dispatched to revenue accounting to ensure that each airline on the ticket receives the right revenue. It is all summarised in the diagram below:
*PTD = Prior To Departure
This is the invisible dance that powers the movement of millions of people all over the globe. By-and-large it works, but when it does not there are big problems – people stranded, baggage pile-ups, congested phone lines, planes left on-stand, high stress, arm waving and revenue loss.
Airlines were one of the first groups of organisations to adopt computers on a wide scale. PSS and their CRS/DCS components had their origins in 1960s punch-card systems with whirring tapes and blinking lights. The problem is that today’s IT platforms evolved from these now-obsolete mainframes and just like part of our brains are reptilian, so the airlines’ systems are, to coin a word, mainframian.
IT issues have hurt British Airways in recent years
Last weekend London-based British Airways had a systems issue, which led to a small but significant number of cancellations, especially on shorthaul. This was not the first time BA has had issues.
In May 2017 75,000 bank holiday travellers were stranded and the airline cancelled 726 flights because someone at BA unplugged a computer.
In 2018 I was at risk from the data breach which led to BA being fined £20 million. Although in the end it turned out that my details were not compromised, BA still paid me a good chunk of change which I had fun frittering away on frivolous pursuits, which their cost control teams will be delighted to hear.
It almost became a tradition that airline CEO Alex Cruz would don his hi-viz jacket and go on TV trying to convince the public that BA was doing all it could to make things right and get people home.
So what is wrong?
During my 2014 revenue management turnaround project with South African carrier Comair, who operate the BA brand in sub-Saharan Africa, I was fortunate to take a look behind the scenes of BA’s systems first hand.
Their booking records are tremendously complex and full of automation. A robot will tell the check in agent what the passenger’s baggage allowance is. Another robot will determine lounge access. Yet another robot will decide which seats the passenger can choose from those available and what their prices should be.
BA have layer upon layer of technology built up on old systems and I just do not think that the infrastructure can support what they are trying to do. From time to time the system literally collapses under it’s own weight.
This is what I think happened in 2017 when a computer was unplugged. After being plugged in again the core system booted up as normal but could not tolerate all the additions so it simply gave up.
The tech stack also gives BA a huge sunk cost in the status quo. This is why I think the data breach happened in 2018. It was simply considered too difficult and too expensive to build security into the IT that BA’s legal commitments to protect their customer’s data were neglected.
I have seen no evidence that any decision not to invest in security was taken purposefully. I expect that this project was simply not a priority. Airline managers have long to-do lists, most potential projects are not attempted and it takes singular persistence to get a something done.
Quite what gremlins were behind last weekend’s issues remains to be seen. But in 2018 BA was a business generating £13 billion annual revenue. Even if, as Alex Cruz claimed, cost cutting is in their DNA, there really is no excuse for them not to have invested in better systems.
What can be done?
I think BA should give 100 startups £1 million each with a goal to build a new commercial operations system for BA – after a year, take ten of the most promising ideas and give them each £10 million. The next year give five another £20 million. I guarantee that within five years BA will have a new way of doing things fit for the 2030s that not only meets their own needs, but they can commercialise it too.
A £200 million to £500 million investment over five years sounds like a lot of money, but compared to a £13 billion annual revenue stream it really is a drop in the ocean. BA led the way with the world’s first fully flat beds in first and business class and achieved a significant and well-known branding coup – they should do the same under the hood too.