ITA Software: The Travel Company Everyone Uses and No One Knows Reinvents Airline Reservations, Again
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experiment with new pricing models that might increase profits—for example, by giving customers simple forms of flexibility like the option of paying an extra $50 for the right to change the date of a return flight without penalty.
In 2005, Montreal-based Air Canada asked ITA to start from scratch and build a new reservation system that would have this flexibility. That took some courage, because “you have to change almost every process at the entire airline,” says Wertheimer. “Luckily, Air Canada wanted to do that. The benefit is that it supports a more varied model of what your product is. There’s a story in the industry that an airline asked its computer system provider if it could add a fourth cabin to the traditional first class, business class, and coach cabins. They were told it would cost nine figures, because the three-cabin model was hard-wired so deeply into the code.” With Polaris, by contrast, almost nothing is hardwired—it’s all just data, bundled in XML-style packages with easily modified descriptions. “If somebody at Air Canada says tomorrow we’re going to have 17 cabins, no problem.”
Of course, airlines don’t have a stellar record when it comes to changing over to new computer systems—the debacles with United’s automated baggage system at Denver International Airport in 1995 and with British Airways’ Terminal 5 at London Heathrow earlier this year are seared into many passengers’ memories. “No one has ever switched from a mainframe-based system to a PC-based system before,” Wertheimer acknowledges. But he says airlines have plenty of experience switching from one mainframe-based system to another—it just takes lots of training beforehand. He thinks Air Canada will be ready to weather the cutover when the time comes.
Creating a team large enough and smart enough to build Polaris is the main reason that ITA has filled up six entire floors of its building—hiring, until very recently, 10 new software engineers every month, using standards not far short of MIT admissions departments’. Polaris is “another one of those insane kinds of projects,” Wertheimer says. “To me, innovation is doing something where you really don’t know how hard it’s going to be, but you’re willing to try it anyway. We have been able to attract otherwise sensible people to come to work on this problem just because it’s so crazy hard.”
One of those people is Dan Weinreb, a veteran software engineer who joined ITA in 2006 after a stint with BEA Systems. In a blog post from last December, about his decision to take the job, he admits he “didn’t have any a priori interest in the airline software field,” but says that he’s fascinated by how software can help real-world organizations process millions of transactions without error every day. In any case, Weinreb writes, his primary job criteria is “that I get to work directly with extremely good software engineers who work well together.”
The Polaris project fit the bill. For Air Canada, Weinreb says, he and his colleagues spend a lot of time working on “high availability: making the system stay up all the time, despite any kind of failure that we can reasonably anticipate. I have been focusing specifically on the problem that we call ‘hot upgrade’: how to install new versions of components of the system, while it’s running, without impacting latency. This is very challenging and a lot of fun.”
Regarding Wertheimer specifically, Weinreb says he’s “the best [CEO] I’ve ever worked for. He knows how to run the business, about the industry, and how to hire great people.”
Wertheimer says the code development for the Polaris project will be done “over the next few months,” but that Air Canada hasn’t announced a specific date for implementing the system. Since nobody these days builds a giant software system for just one client, ITA has a lot riding on the debut.
“It will be interesting to see how long it takes before customer number two signs up,” says Dave Baggett, ITA’s co-founder, who sat in on my interview with Wertheimer (Baggett also went to MIT and was the developer behind one of the very first successful Sony Playstation games, Crash Bandicoot). “Once customer number one is out there, there’s less courage required.”
“We have lots of potential number twos coming by our sales office every week and hovering around,” Wertheimer asserts. “Nobody wants to be number three. In the airline business, it seems that there are only three numbers—one, two, and infinity.”
In practice, of course, there will probably be lots of number threes, just as there were for QPX. “Five years ago, people in the airline business still thought they might get another 20 years out of their existing systems,” says Wertheimer. “But over the past few years, they’ve pretty much decided that they need new ones. Everybody is looking for somebody to be the crazy first person to jump into the water, because it might be pretty challenging. But when oil was at $140 a barrel, companies were under tremendous stress, and they were becoming pretty innovative. They aren’t in such dire straits now, luckily, but the fact that oil is back down to a reasonable level doesn’t mean that your airline isn’t going to go out of business next year. So it’s not a bad time to innovate.”