Continental, United to seek shared technology platform

By Michael Fabey

Continental and United plan to forge a common information technology system as part of their new relationship as Star Alliance partners, Continental CEO Larry Kellner said.

"What we continue to be focused on is getting Continental and United on a common platform," Kellner said during Continental's quarterly earnings call with reporters and Wall Street analysts earlier this week.

"Where it is appropriate, when we are ready, we will announce where we are going," Kellner said.

But both airlines share the goal of creating a common platform, which "will solve a lot of customer issues," he said.

He said, "From the customer service side, one of the challenges we have always had in these alliances is IT."

The Transportation Department, over the objections of the Justice Department and others, recently granted the Star Alliance's request for expanded antitrust immunity, bringing Continental into the group as part of a four-carrier joint venture with Air Canada, Lufthansa and United.

As part of its request, the alliance said its members would see significant reductions in fixed and operating costs as a result of technology integration.

Airlines are obviously putting greater stock in the importance of IT integration for carrier mergers, as well. Delta hired an outside academic expert to assess parts of that integration in its merger plan with Northwest.

Blending IT platforms for two carriers that will become a merged corporate entity is one thing; creating a common platform for two carriers that are part of a bigger alliance with separate corporate airline operations will be another.

United, creator of the Apollo system, uses Travelport (which owns Apollo) for its IT platform. Continental relies on Shares, provided by Hewlett-Packard’s EDS. Amadeus provides a common IT platform for Star.

"From an IT side, there are always challenges," Kellner said. "But a lot of that work is done, and I feel confident. Clearly sitting here today, we are always worried about revenue hiccups as you have IT issues and other things."

Part of the problem is that Continental must first fully depart the SkyTeam alliance before the carrier can join Star and the true integration can begin.

"On Oct. 24 we will leave SkyTeam," Kellner said. "We will be in Star just as fast as we can be after that. It won’t be seamless in the sense that we cut out of SkyTeam on the 24th and go to Star on the 25th.

"Think days, don’t think weeks or months," he added. "We just can’t do anything until we get out of SkyTeam to jointly market with any of the Star partners, or be involved with any of the Star partners."

There will be a booking and marketing lull, Kellner said. "You do have a period where you are taking bookings for November and December where you are not yet in Star, but yet you are not marketing SkyTeam carriers."

Continental and United executives have been very careful, too, to point out the DOT antitrust approval only covers international service.

That's not to say the carriers wouldn’t like to see such immunity for domestic operations. "Oh, we wish," said James Compton, Continental's executive vice president of marketing.

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