South-Western - Management  
A timely turnaround: United Airlines uses new IT systems to raise on-time performance.
Topic Using IT systems
Key Words Information technology, IT, systems integration
InfoTrac Reference A114008503
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News Story

According to the Department of Transportation, United Airlines recorded the second-best on-time performance of 18 reporting carriers, 83.9%, for the 12 months ended in November, 2003. Much of United's improvement is attributable to new software systems that have permitted it to perform real-time event planning. The system manages crew scheduling, flight status and gate information. It provides executives with day-old information on the carrier's flights, passenger figures, weather, cancellations and on-time performance. Using scenario models, the system is able to predict the future operation for up to a week. United now can not only respond quicker to unscheduled events, but also take "proactive actions" to minimize the impact on passengers and crew. Eventually the system will be broadened to include baggage handling, flight dispatching, air traffic management, catering and maintenance functions.

Another piece of United's IT system helps dispatchers and weather specialists make rapid decisions about flights operating in bad weather, avoiding or minimizing flight delays or initiate a diversion of aircraft to other airports. Yet another piece provides tentative assessments, marketing analysis and operational support performance information using captured flight data.

United has also began upgrading its baggage handling system, which allows the carrier to tell what bags have not been scanned for a flight and how far a bag is from an aircraft.

United expects to save $17.4 million in crew and fuel costs for 2003, $18.5 million in 2004. When other factors are included, such as delay minutes and customer intent to repurchase, the projected savings jump to around $45.8 million and $48 million for 2003 and 2004 respectively.

Questions
1.

What do you think about United's priority in implementing its IT systems?

2.

What are the limits of using information technology as a solution to business problems?

Source Robert Moorman, "A timely turnaround: United Airlines uses new IT systems to raise on-time performance." (Information Technology), Air Transport World, March 2004.
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