13 Jun

How the Digital Age Has Shaped Mergers as We Know Them

Technology: The Crucial (Often Overlooked) Element in a Merge

Unless you’ve been living under a rock, or are a recent time traveller from the 1947 (in which case, welcome, we put a man on the moon yet decent tasting cough medicine eludes us still) you’ve probably been besieged with article upon article in regards to mergers. There seems to be some contentious merger drama in the airline ether these days, but even from a general perspective, mergers are big news when they happen.

Questions of monopolies, market values, company names and procedures aside, since ELP’s expertise is in all things aviation, I figured it best to stay in my lane, and contemplate the more nuanced characters at play when a merger occurs. The players not often considered, such as, technology.

21st Century Merge

If you think about it, the gargantuan mergers we think of today would have been inconceivable to the entrepreneurs of yesteryear. There were limitations (think of geography, communication, expertise) that technology has outgrown in terms of what is possible today when two companies become one, however that evolution is not without cost. New complications arise with every new innovative opportunity, and while the outwardly facing questions are typically the ones most considered- I mean often times the very brand name is at stake, of course this is going to be at the forefront of thought and the news cycle- what people rarely consider is the behind the scenes actions that make a merger possible.

In terms of mergers in aviation, there are 2 main paradigms at work; 2 airlines are becoming 1 (how romantic) or a singular airline is switching it’s software. Both of these seem casual- it feels like they happen all the time.

Both of these undertakings are gargantuan in scope- a complex symphony of technological vision and precise digital choreography during which even the slightest mistake could spell devastating failure and innumerable expense at a time when both carriers need to reassure investors and customers alike that this union is a strength, not a weakness.

Now is Not the Time to Pinch Pennies

With so much on the line, you’d think that cutting corners would be the last option on everyone’s minds. But in talking with my boss and ELP founder Erwin Ponce, from the mergers he’s seen (and done digital CPR on after the fact) unfortunately, short-sightedness is not only a kiss of death, it’s pretty prevalent among those airlines looking to merge.

Listen, as someone who didn’t even give this issue much though outside of blanket annoyance when I was a flight attendant and they completely switched our payroll procedures, I get it. I have a hard time even conceptualizing the time, effort, and tech it takes to run a singular operation.

Now you want to merge 2? Good luck with that.

Erwin pointed out that there isn’t even a guarantee that both airlines use the same software- color me overwhelmed just in thinking about this.

If, however both airlines utilize the same programs things are easier. “They’re not easy,” Erwin was quick to point out, “they’re just easier.”

To a “regular” there are things to consider that they probably don’t even know exist. For an aviation expert and software developer, there are infinite things to consider, and all of them are crucial. Are there overlapping employee numbers? How are employees at each airline paid? Which parts of each contract with be honored and patched together? Sick policies? Training standards? (mentally at this point, I have to go my Uber is here).

Do it Right or Not at All

It’s probably because in breaking down everything that needs to happen, it’s one of the most complex processes I’ve ever had to think about (and I was in honors Biology) that I’m tempted to cut and run mentally. So I can only imagine the mental toll it takes on those at the helm. It’s no wonder at some point they tend to throw up their hands and cry “Whatever! It’s done on this date and anything that doesn’t get analyzed or switched over just doesn’t get switched over.”

The problem here, is that you’re saving time (maybe even money) upfront, but it’s going to come back and bite you later.

“The one area that airlines tend to forget is crew qualifications and the qualification software that tracks all their training and everything,” bemoaned Erwin, “it requires a lot of coding for one airline and you’re trying to merge two airlines into one. Now the coding becomes an absolute tear out your hair nightmare

And this is where airlines tend to also cut corners and get in trouble because they don’t want to get into the mess of trying to merge two systems. So instead what they do is they try to draw a line in the sand for one airline and say, ‘Okay, all the employees will move in from airline A to airline B, we’re not going to carry over any other training. We’re just going to put markers for their due training dates and keep the old training stuff in the old system’. And it’s possible to do that. However, later, they’re going to be paying for it for years to come because every time they need to pull a historical training data, they’re going to have to go to two systems and try to merge the two. It’s just a mess.’”

How to merge systems and influence coding

In speaking with Erwin, the takeaways I took in terms of making a merger (with the least amount of fallout), were: to have a timeline in place, to write out the specifics of what has to happen during that time, and to pad it or otherwise expect delays.

My boss agrees. “I highly encourage airlines to start really early in the process of mapping the whole thing. Both airlines have to work together carefully, closely. They both have to understand each other’s processes, techniques, everything, and working either with an I.T. department at one of the airlines or with a vendor- it has to be a long coordinated effort to get it done properly.”

Also, as an ex-crewmember I can tell you it would have been nice to be consulted. Our payroll system was no picnic- it was complicated and redundant. The one we switched to was no better. If these policies that you are shaping affect people on the front lines of your business, why not put out surveys either before the switch or during to see about the actual functionality. Things often look great on paper, but in execution are sorely lacking.

Bottom line, you probably need at least a consultant, if not a software expert to guide you through the interminable and complex process of merging 2 airlines. I say this not as a plug for the company I’m proud to work for, I say this as an ex-crew member who experienced the failings of a poorly handled merger firsthand.

This is not to throw stones- as I said above of course things were going to go wrong. This process is extremely intricate and complicated. But if there was a way to make it easier, and to preserve your reputation in the process wouldn’t you take it?

We’ve done this a time or 2

This is where I remind you that ELP just so happens to be an aviation software company, and that we’ve assisted in easing the burdens inherent in several mergers to date.

It’s also classic Erwin optimism to view a merge as a potential opportunity for both airlines. “Another point to make in these you know, in these technology mergers or move overs, the way that I see it, when I go through the interview process with the carrier, I tell them, ‘ Look, this may be your one and only opportunity to also fix things that have been nagging at you for years and years. For example, you guys created a code seven years ago that you’re not happy with, that you want to change. Well, you can’t do that in the system because you got seven years worth of history- it’s very expensive and difficult to do that. So you just live with that code even though you don’t like it.’ Well, if I’m going to do open heart surgery on software, I might as well fix everything, including the things that have been bugging the airline forever.”

ELP’s expertise knows what you need, especially during a merger. It also means that instead of overhauling your software and procedures completely, we can meet you where you’re at. The customizability of the tools we create as well as their ability to integrate seamlessly with existing software and fill the gaps as needed, means less change for you and more innovative efficiency for your team. Can you say, “Dream partnership”?

The bottom line here being, that even though the act of merging technologies may seem like a huge headache, it’s all in how you view it. We at ELP are ready to help you take this from complication to catalyst for positive change; Erwin agrees. “If you have people that are dedicated on the airline side and want to do it right, it’s a perfect opportunity to clean up your dirty laundry, clean up your house and if you don’t do it, shame on you because this is it. It’s your one chance to do it right.”

Posted by | Posted at June 13, 2022 12:38 pm |

Leave a Reply

Your email address will not be published.

About us

Airlines depend on ELP Aviation because our software improves operational efficiencies, eases crew interactions, and increases profitability. We offer products that provide scalable and agile solutions based on the individual Carrier’s needs. We’re already thinking about how to solve the next problem.

Learn more
Locations

Headquarters:  103 W Spring Ave, Conway Springs, KS, USA

Branch Office: Narayana Enclave, Plot No 610, Road Number 33, Jubilee Hills, Hyderabad-500033, Telangana, India.

Contact Us
+ 1 (316) 239-6080

info@elpaviation.com

 

Account
If you are an ELP CrewPortal App user please contact your Department for questions.

@ ELP Aviation, Inc. 2020

About us

Airlines depend on ELP Aviation because our software improves operational efficiencies, eases crew interactions, and increases profitability. We offer products that provide scalable and agile solutions based on the individual Carrier’s needs. We’re already thinking about how to solve the next problem.

Learn more
Locations

 

Headquarters:  103 W Spring Ave, Conway Springs, KS, USA

Branch Office: Narayana Enclave, Plot No 610, Road Number 33, Jubilee Hills, Hyderabad-500033, Telangana, India.

Contact Us
+ 1 (316) 239-6080

info@elpaviation.com

 

Account
If you are an ELP CrewPortal App user please contact your Airline Department for questions.

@ ELP Aviation, Inc. 2020