United Airlines blames computer glitches for massive loss

Apr 29, 2012
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United Airlines posted its quarterly earnings at the end of last week, showing a very unimpressive $448 million net loss. Among the many factors that the company pointed to, it blamed computer outages and glitches as being one of the most costly. It is also, of course, one of the things that was most preventable. Airlines can't choose how much fuel is going to cost over the next several months, but it can be sure it has a robust computer system.

United, which merged with Continental Airlines in 2010 to create the world's largest airline, experienced huge problems when it tried to combine two independent computer systems into one integrated network. To anticipate potential problems, the company changed some aspects of its business, like underselling flights. But that was in the best of circumstances.

In early March, the computer migration process caused huge problems, resulting in delays that left many customers stranded for days - something that just shouldn't happen because of computer problems. "We weren't able to deliver the level of customer service that we wanted and that our customers have come to expect," said CEO Jeff Smisek during the earnings call. In total, United lost $1.36 per share in the first quarter, about 20% more than analysts had expected.

[via BusinessWeek]


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