Dive Brief:
- Southwest Airlines selected AWS as its preferred cloud provider, the airline announced Wednesday.
- The cloud vendor will “offer solutions that are critical in our drive to modernize our operation, equip our employees with the tools they need to serve our customers and improve our reliability,” Lauren Woods, senior vice president and CIO of Southwest, said in the announcement.
- Woods was promoted to CIO in February, just two months after a winter storm initiated a chain of technology failures that led Southwest to cancel thousands of flights, stranding tens of thousands of passengers and costing the company an estimated $800 million.
Dive Insight:
In the wake of the December meltdown, Southwest CEO Bob Jordan defended the carrier’s technology while acknowledging that crew reassignment systems failed. He pledged $1.3 billion to IT and other operational upgrades this year, during a January earnings call.
IT crews patched affected systems and installed warning dashboards to prevent potential shutdowns, but the AWS cloud deal is the first major strategic initiative Southwest has made public since December.
Southwest has an existing relationship with the CSP. The airline was a public case study for AWS and its partner Onica in 2020, for net new services rather than modernization, Lee Sustar, principal analyst at Forrester, said in an email.
The new agreement encompasses a large-scale, long-term digital modernization plan that will enhance passenger experience applications, operations and IT infrastructure, according to Southwest.
The airline plans to use automatic scaling capabilities to process real-time fare searches more effectively and upgrade customer services and employee tools through an AWS-powered innovation lab, the announcement said.
Lack of progress on IT upgrades was a sticking point for the Southwest Airlines Pilot Association, when it threatened a strike in January.
“Most airline customers will not keep track of which cloud provider their airline is using,” said Sustar, “but employees and investors will certainly take notice, as technology issues have been an issue for Southwest’s unions.”
Amazon Redshift will provide Southwest with modernized data warehousing and better analytics capabilities; SageMaker will give data science teams ML tools for multiple use cases, according to Southwest.
“This major component of Southwest’s data strategy certainly indicates a renewed seriousness about operational performance and business growth via a high-resiliency, high-capacity data platform,” Doug Laney, data and analytics innovation fellow at West Monroe, said in an email.
Better tools won’t mitigate against future incidents. An organizational shift will be needed as well.
“The overall strategy must also deal with other challenges,” said Laney, “such as culture, data and digital literacy, data and analytics governance and architecture and the ongoing ability to conceive and implement high value use cases.”
