Dive Brief:

• Southwest Airlines has promoted Lauren Woods, the company's VP of Technology, as its new SVP and CIO, the company announced Wednesday. 
• Woods will replace former CIO Kathleen Merrill, who has been with the airline for almost two decades and will transition to an executive advisor role. Merrill announced her retirement in September, the company said in an email. 
• In the new position, Woods will "play an important role" in managing the airline's technology investments, upgrades and system maintenance, which are expected to reach $1.3 billion this year.

Dive Insight:

The leadership shift at Southwest comes months after the airline endured a major IT outage and operational disruptions during the holiday travel season. In an SEC filing, the airline said the event cost it more than $725 million, between additional operating costs and estimated revenue losses.

It will fall on Woods to help lead the company through its transformation, building on her 12 year tenure with Southwest. She will also focus on transformation of the airline's enterprise data platforms, the company said.

Aviation sector companies have long struggled to keep up with technology modernization, often trailing other industries in terms of IT investments.

The failure of Southwest’s crew scheduling systems shows why technology investments are critical to any business, according to Ted Schadler, VP and principal analyst at Forrester.

"Southwest’s reputation was lost in an instant by not executing on something that the company must have to succeed," Schadler wrote in a January blog post.

Leadership structure matters when it comes to technology initiatives. Among the major airlines, Southwest stands out for having key technology leaders report to a leader who is not the CEO, Schadler wrote. 

Woods will report to Linda Rutherford, chief administration and communications officer, and will join the company's senior management committee.

In organizations whose CIOs hold C-suite clout, the executives report directly to the CEO. "It's vital for any company committed to getting the most from their technology," Schadler told CIO Dive in an email.