After Holiday Server Meltdown, Southwest Partners With Amazon

(Bloomberg) -- Southwest Airlines Co. will use Amazon.com Inc. servers to help process fare searches, crew scheduling and other software tasks, a modernization of its technology that comes months after a meltdown stranded thousands of the airline’s passengers. 

Amazon Web Services will become Southwest’s “preferred cloud provider,” the e-commerce giant said on Wednesday, calling the move a “large-scale migration” of the airline’s digital infrastructure to the cloud. Southwest will use AWS to power elements of its website and mobile app, store data and run internal analytics. The companies declined to discuss financial terms of the multiyear deal.

Southwest already runs some software on AWS, including gate management and departure control programs, said Lauren Woods, the low-cost airline’s chief information officer. “We definitely have plans to do other critical-for-operations and future required-to-fly applications, bringing those into AWS,” Woods said.

Southwest faced widespread criticism from customers and industry regulators and was called before a congressional committee after it scrubbed more than 16,700 flights in the final 10 days of December. At the time, the Dallas-based airline was contending with a powerful winter storm that moved across the northern US, grounding flights and causing Southwest to lose track of its aircraft and flight crews.   

The situation became so bad that the airline canceled the majority of its schedule over several days to reset its flight network, affecting more than 2 million passengers. The meltdown will cost the airline at least $1.15 billion over two quarters due to scrapped reservations, reduced bookings and higher costs.   

Amazon and Southwest were having talks to expand their relationship before the scheduling fiasco, said Matt Garman, AWS’s senior vice president of sales and marketing. “It’s not like this stuff happened in December and they jumped with us,” he said. “It’s really kind of a full modernization of a lot of their flight operations.”

AWS is the world’s largest cloud provider, selling rented computing power, data storage and software services to businesses — including some that have decommissioned their own data centers in favor of Amazon’s server farms. The company often touts deals with marquee customers like airlines. United Airlines Holdings Inc. and Delta Air Lines Inc. also named AWS their preferred cloud partner in recent years. 

Southwest has said that its existing technology didn’t fail during the December disruptions, but that cancellations built so rapidly that crew scheduling software from GE Digital, a unit of General Electric Co., was overwhelmed. That software was upgraded in February to correct the deficiency. Woods was named Southwest’s CIO on Feb. 1.

Southwest is the target of a federal probe into whether the carrier’s scheduling violated rules forbidding unfair and deceptive practices when it left millions stranded. The airline is awaiting the results of a report it commissioned from consultant Oliver Wyman on what went wrong. 

Woods said Southwest plans to maintain its own data center, in part to keep its options open to run some of the applications from its wide range of software vendors.

“The footprint may get smaller,” she said. “I just don’t see it going to zero.”