Like other major U.S. airlines, American has found itself falling behind foreign carriers in moving to a modern -- and flexible - architecture for its POS and FOS systems. A modern software and hardware infrastructure will allow American to move much more quickly in a world where a substantial percentage of business comes in through AA.com, the airline's website, as well as from travel partners around the Web.
To adapt, American has over the years bolted new features and functions onto the mainframe through the use of application front ends. But that still limits flexibility when it comes to distributing and bundling new fare offerings or creating different privilege options for customers, such as lower change fees or refundable tickets. Today's airlines need to be nimble, respond quickly to market changes, and be free to sell they way they need to sell. "You see very few 47-year-old cars on the road these days. But with the airlines, some of their most important decisions are tied back to Mad Men-era technologies," says Harteveldt.
Former CIO Monte Ford initiated and managed the projects until 2011. Ford departed after 11 years as American's CIO for reasons that were not made public, and the airline tapped Leibman, the former president of American's AAdvantage Loyalty program, to fill the role in December 2011. That was a month after the airline filed for Chapter 11 bankruptcy protection.
It was Leibman who reversed the initial build versus buy strategy last January -- a move that Harteveldt calls "gutsy."
"It takes a lot for a CIO to go to management and say, 'I think we need to rethink this decision,' " he says. American IT execs won't comment on how far they had gotten, or how much they had spent. But the airline hadn't started coding to replace the Jetstream/PSS yet - that project was still in the business process evaluation stage. On the FOS side, work had already been completed on many programs.
The decision to change focus was driven not just by the need to reexamine priorities as the business reorganized, but by changes in the market that could not have been anticipated when American made its original plans. Initial planning for the projects began with American's outsourcer, EDS, before Hewlett-Packard acquired it in 2008.
But after the projects officially launched in 2010, HP laid off many airline-related programmers, project managers and others associated with the Jetstream project, according to Harteveldt. "That was one of the factors that contributed to the project's problems," he says. "It just became a very frustrating experience for American."