Power outages highlight IT importance

New York - Delta Airlines’ announcement this morning that a power outage in Atlanta caused a global computer outage, leading to significant numbers of flight cancellations and delays, provides the most recent example of the importance of IT systems in the airline industry, according to Fitch Ratings.

Delta’s outage comes just weeks after a router failure caused Southwest to cancel some 2,300 flights over the course of several days.

The heavy reliance on computer reservation systems and the interconnectedness of airline schedules means that even minor outages tend to cause ripple effects that affect the network well beyond the time of the initial outage.

Events like today’s outage are not expected to have an impact on ratings. Fitch upgraded Delta to ‘BBB-’ in May 2016. The company has made material improvements to its credit profile in recent years as it has paid down debt, improved profitability and firmly established its ability to generate meaningful free cash flow.

Likewise, Fitch upgraded Southwest to ‘BBB+’ in October 2015, which places it among the highest rated airlines globally. Southwest’s investment-grade rating is supported by solid credit metrics, a demonstrated ability to generate free cash flow its competitive position in the US domestic market, its strong brand and its sizable base of high-quality unencumbered assets.

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