Delta Air Lines and Southwest Airlines are very different airlines. One is a global full-service airline with a fleet of varied aircraft types and multiple product offerings for passengers, while the other is the world’s original low-cost carrier with an all-Boeing 737 fleet, no business class and a mostly domestic operation. But the US carriers have two things in common: both make operational reliability a key selling point and both recently suffered severe technology meltdowns that damaged their reputations for reliable service. Each airline was forced to cancel around 2,000 flights over several days.
First came Dallas-based Southwest, which suffered what it called a “system-wide technology outage” on July 20. “There was a network equipment failure and the planned redundancy, or backup, failed as well,” chairman, president and CEO Gary Kelly explained. COO Mike Van de Ven said Southwest’s “redundant systems” didn’t work, forcing the airline “to reboot about 400 servers,” a process that took 12 hours.
In a video posted on Twitter the week of the system failure—part of Southwest’s effort to inform and apologize to passengers—Van de Ven noted all of the spillover effects that resulted. “We have an incredible backlog of customers and bags, and we have crews in places they’re not supposed to be,” he said, adding that Southwest also “had a fare sale going on in the middle of all of this” on its website that was disrupted by the technology failure.
Southwest gave a hint of the extent of the damage in an Aug. 10 report detailing its July traffic. The flight delays and cancelations from the July 20 incident will cause an 0.5 point unfavorable year-over-year impact to third quarter 2016 RASM, the airline stated. “As a result, the company now expects its third quarter 2016 RASM to decline, year-over-year, in the 3.5% to 4.5% range, versus its previous guidance of a year-over-year decline in the 3% to 4% range,” it said.
That likely means a financial hit totaling tens of millions of dollars. But some of the impact is incalculable. “I realize how frustrating it can be” to have travel plans disrupted, Van de Ven said, adding, “Some of those travel plans were for really special moments that can’t be replaced.”
Delta, meanwhile, spent much of the first half of 2016 touting is operating performance advantage over American Airlines, United Airlines and Southwest. “We’re operating the best airline on the planet and it’s not even close,” CEO Ed Bastian said at the company’s media day in the spring, pointing out that Delta had more “100% completion factor days”—by a wide margin—than its three US rivals combined.
As of Aug. 7, Delta had canceled just 300 total flights in all of 2016. But despite the fact that Delta has spent hundreds of millions of dollars on technology safeguards, an early morning Aug. 8 power outage at its Atlanta headquarters led to a disastrous operational failure. That’s because critical systems inexplicably did not switch over to redundant backup power (sound familiar?) and the carrier had a technology crash that required a reboot, forcing its entire global operation to be grounded for several hours.
“This isn’t who we are,” Bastian said in a one of several apology videos Delta posted online in the aftermath of the system failure. Beyond the monetary hit Delta will incur in its third-quarter earnings, the episode is a significant negative mark on one of Delta’s core brand claims—that it is operating the best, and most reliable, airline in the world. Bastian and other executives will have to cool it for a while on the operational reliability horn tooting.
The dual system failures at Southwest and Delta lead to a number of questions. First, why did their backup systems fail? What is the point of investing so heavily in redundant systems if they can’t be relied upon at critical times? And if the backup systems are inadequate, how vulnerable are Southwest, Delta and other airlines to similar system crashes occurring in the future?
The competitive stakes are high. Just a week after its system crash, Delta announced that it will introduce an all-suite business-class cabin on its first Airbus A350-900 arriving next year, and will roll out the new business-class offering on additional aircraft over time. The A350 business-class cabin will feature 32 suites with full-height sliding doors. Delta has 25 A350-900s on order and will also install the suites on Boeing 777s. Among other amenities, each suite will also have a lie-flat seat with a memory foam cushion and an 18-inch high resolution inflight entertainment monitor.
The “Delta One suite” and the fact that Delta’s entire A350 business-class offering will be comprised of these suites are truly innovative concepts among the US majors that show Delta is finally trying to compete with the passenger offerings of Asia-Pacific and Gulf global long-haul carriers.
But however luxurious the service, what passengers – especially business travelers – value most is reliability and an on-time arrival. No fancy suite is going to hold its appeal if the airline can’t deliver the fundamentals.