Hands Off At Delta
To Delta, buying Comair - one of its most profitable regional partners - was a no-brainer. It made money. It was an industry leader in on-time, cancellation and missed baggage statistics. And it was a stock market darling. "Before Delta came in, Comair was one of the best managed and most successful regionals in the country," says Holly Hegeman, an airline industry analyst and founder of PlaneBusiness.com. "They had the reputation of being the top dog."
By all accounts, Delta's attitude toward Comair was: Why mess with success? Even IT looked OK to Delta. On paper, Comair had project time lines, good budgets, everything you'd expect to see. "So there was no mandate at the Delta level to get the Comair IT ship righted," Hegeman says. The only area Delta appeared to be concerned about was marketing; the parent airline replaced the entire marketing department at Comair within days of taking over.
Comair, like most acquired companies, wasn't exactly welcoming to its new owner either. "There was definite friction," Hegeman says. "Top management at Comair didn't take kindly to being part of mother Delta." So Comair continued to run independently for the most part - although as a wholly owned subsidiary, all major capital expenditures had to be approved by the parent company, Bardes and others say.
After Dublikar left, the IT director position stayed vacant for a number of months. In early 2000, Mike Stuart, senior vice president of flight operations, was given oversight of IT. And in March 2000, Sherri Kurlas-Schalk, who had been with the company since 1990, was named IT director. The tendency in the IT department, meanwhile, was to "keep your head down" and not draw too much attention to anything, according to Bardes, who left Comair in late 2003 to join software and IT services company Compuware as a senior systems designer. After the uncertainty in IT leadership and the takeover by Delta, there was a palpable lack of commitment to projects in IT. "Everyone was expecting someone else to move projects along," Bardes says. "The business units were expecting IT to push a project through. And IT was waiting for the business unit to push it through."
The five-year plan, which was supposed to be revisited on a regular basis, languished.
In 2001, an 89-day pilot's strike from March to June shut down Comair and the Cincinnati/Northern Kentucky International Airport, where Delta and Comair operate 90 percent of all flights. Comair closed its Cincinnati concourse, losing more than 800 daily flights and saddling Delta with a $US200 million loss for the quarter. Once the strike was over, Comair's flight operations group, the primary users of the crew scheduling system, had their hands full getting planes back in the air. "You can't just switch things on and get an airline running again," says Bardes. "There's a lot of inertia and momentum lost when you shut down, and it's hard to get started again." During this period, they gave little or no thought to replacing the crew scheduling system.
Then came 9/11, crippling airlines big and small, and pushing some of the largest carriers into bankruptcy. Though Delta has thus far avoided that fate, the airline lost nearly $US8.5 billion over the following four years, increasing the pressure to keep costs down. While there's no evidence that Delta refused to fund an upgrade for the crew scheduling system, "approval for capital expenditures seldom went through the first time [at Delta]", Bardes says. "They'd want more analysis. They had a definite influence on how fast money got spent."
Delta declined to comment for this story and referred questions to Comair. Comair spokesman Nick Miller would say only: "We've been very straightforward in acknowledging the challenging time we've been facing in the airline industry and that we've had to be very prudent in how we've invested in technology."
Late in 2002, the Comair IT group did turn its attention back to the crew management system and brought in several vendors, including Sabre and SBS, to perform demos. Comair went down the road a bit with one vendor, which it refuses to name, but ultimately backed out during contract negotiations due to pricing concerns. All in all, there seemed to be no hurry on either Comair or Delta's part to get the project rolling, even though the crew scheduling system was (and still is) the oldest application of its kind still running at a regional carrier, according to a recent survey by Regional Aviation News.
Finally, Comair got approval from Delta to replace the legacy SBS system and inked a deal with Sabre in June 2004 to implement its AirCrews Operations Manager. Implementation was set to begin in 2005. But by then, it would be too late.
On December 16, Comair reported an operating profit of $US25.7 million in the third quarter of 2004. A week later, a severe winter storm hit the Ohio Valley. The snow came with sleet and freezing rain. De-icing the jets took much longer than expected and some jets' tyres froze to the ground. From December 22 through the 24th, Comair had to cancel or delay 91 percent of its flights.
And another problem was looming. As it turned out, the crew management application, unbeknownst to anyone at Comair, could process only a set number of changes - 32,000 per month - before shutting down. And that's exactly what happened. On Christmas Eve, all the rescheduling necessitated by the bad weather forced the system to crash. As a result, Comair had to cancel all 1100 of its flights on Christmas Day, stranding tens of thousands of passengers heading home for the holidays. It had to cancel nearly 90 percent of its flights on December 26, stranding more.
There was no backup system. It took a full day for the vendor to fix the software. But Comair was not able to operate a full schedule until December 29.