November 15th, 2006
US Airways and Delta means more IT integration
US Airways just can't get enough of integrating technology systems. The airline, which was formed via the merger of US Airways and America West, is now offering to buy Delta for $8 billion in cash and stock to create a "new Delta." Meanwhile, the technology systems of US Airways and America West haven't been completely integrated, according to a US Airways spokesman.
The merged US Airways got off the ground a little more than a year ago and the company's information systems were estimated to take about two to three years to combine. US Airways told investors today that if Delta accepted its offer it could save $200 million by merging information systems, a large chunk of the $710 million in annual savings the merger would create. According to US Airways a single system is needed in most cases with redundant systems being jettisoned. Indeed, US Airways Joe Beery will be in a race against the clock to wrap up the US Airways-America West IT integration before Delta arrives, but he seems to be on track. Baseline's David Carr updated the status of the airline's technology integration last month.
In US Airways investor presentation today, the company said the integration work from the America West deal will be finished before Delta is acquired indicating that US Airways is ahead of schedule. The company projected today it would cut over to one reservation system in the first half of 2007. Electronic Data Systems is likely to play some role in the cutover.
As for Delta, a merger would be bittersweet to the airline's technology department. Delta bet big on technology to keep the airline out of bankruptcy, but the wager fell short. It is yet to be determined what happens to Delta's systems if US Airways takes it over. It'll most likely be Beery's call.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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