On the finance side, Maguire's using Microsoft Dynamic GP (formerly Great Plains). The implementation cost him $US500,000, versus the estimated $US2 million to $US3 million Oracle price tag. Timing, often, is everything. "A few years ago, Great Plains wouldn't have been robust enough to support us," Maguire says. "Today it is." Maguire is also overseeing the custom construction of Virgin America's Web-based booking engine, with a Web design company called Anomaly working on the front end and Indian software shop NIIT coding the back end. "It's a cost-effective way to do it," he says.

And Then There's CRM . . .

In the CRM space - an area that most airlines have deemed to be cost-prohibitive - Virgin America has the advantage of starting from scratch, unlike most airlines. It plans to implement a hosted customer feedback system from RightNow and will build its own CRM system to manage all the data it collects. "We don't care if this guy last Tuesday wanted a scotch neat with ice on the side," VP of Guest Services Pawlowski explains, but he does care "if we messed the guest around in the past, losing their bags". The attendants will know that, and the "guests will know we're paying attention and we're doing something to improve service. It's pretty ambitious".

To avoid the cost of either building a call centre or managing its own work-at-home team the way JetBlue does, Virgin is outsourcing its call centre to Willow, a provider of at-home agents. It's a big cost saver, certainly, but for an airline hoping to differentiate itself through customer service, it's also a big risk.

"It's an issue that we debated long and hard," Pawlowski says. The plan is to have Willow recruit specifically in Virgin's operating markets so the company can invite family members to the airports, let them use the products and services, and "throw other swag at them" to get them on board, says Pawlowski.

White-Knuckle IT

There are risks associated with all of Virgin America's IT choices - from outsourcing customer-facing roles to utilizing systems just robust enough to support the mission to implementing less-than-proven technologies. Maguire knows all this. When, for example, he first implemented a VoIP system at Legato, he lost power and saw his whole telecom system go down. "You stub your toes every now and then," Maguire admits. "But you learn. And overall, [taking risks] can make a huge difference."

All told, Maguire estimates he's saved the company $US500,000 in his first six months on the job and says he "will" save the company $US2 million a year "with the way we're building, managing and operating our systems."

But, cautions Forrester's Harteveldt, "[Virgin America] will have to make sure that [these technologies] will support them - not just when they start up with a handful of planes, but in theory when they have 100 or more airplanes. You don't date technology in the airline industry; you marry it."

Next-Gen Reservations

One of the most important systems Virgin America will be walking down the aisle with is its reservations system. These systems are the central nervous system of any air carrier. Despite the name, they handle not only passenger reservations but also inventory control, fares and ticketing, schedules, baggage and interface with departure control functions. And they touch every other system an airline runs on, from flight operations to Web-based booking engines. "[Reservations] can have an impact on everything from what you pay your pilots to FAA-mandated maintenance," Harteveldt says.

Established carriers tend to operate on robust legacy systems such as Sabre or Shares (both supported today by EDS).

But these feature-rich systems run on mainframes and are expensive to maintain and difficult to customize. Younger, low-cost carriers, such as Airtran and JetBlue, have opted for Open Skies from Navitaire, a less expensive and much more basic Web-based reservations system. What both systems have in common is that, like all software that's been around for a while, the airlines that run on them face the challenge of upgrades or switching to new systems.

"Advances in tech have given the new airlines the ability to provide as robust a reservation system as something that previously would have been only available through a Sabre," says The Boyd Group's Sieber. "And as these newer systems become more evolved, they also give management the ability to do some incredible data mining that will enable them to make better business decisions."

Virgin's new reservations system is called Aires. Development was funded by travel giant Cendant and is being developed by Indian software developer IBS. The system is built on open architecture standards with a database layer, an application layer and a Web services layer. "It's fast, flexible and amazingly configurable," says Maguire. "We can run the business the way we want to instead of being dictated to by Sabre or Navitaire." In essence, Aires offers Virgin a hybrid solution - one with the extended functionalities available in a Sabre system on a lower-cost platform. "If an airline wants to install an extra premium economy section, they can easily make those changes. It's designed to interface well with kiosks and Web booking engines," says Harteveldt. "It's easy to operate, easy to train on and easy to manage."

Brian Clark, vice president of planning and sales, led the deal with Aires before Maguire joined the team. "When I was at US Airways, I was involved in the cutover from an old reservations system to Sabre, and I have a huge amount of respect for what technology can do for us," Clark says. "From a business perspective, new systems like this are fantastic because [they] allow us more flexibility than older systems. We can grow without limitation." Down the road, Aires could allow Virgin to integrate with travel partners, offering customers the ability to check in for a flight when they check out of a hotel or reserve a rental car when they check in for a flight.

The only other customers signed on with Aires are Virgin Blue in Australia and WestJet, a low-cost Canadian carrier, so Virgin America will have a first-mover advantage stateside. Of course, it will also assume first-mover disadvantages.

"You've heard the old saying, no CIO ever got fired for buying IBM? Well, no airline CIO would ever be dismissed for going with Sabre," says Harteveldt. "There's always risk with a new product that's just proving itself. There will be hiccups," he predicts.

No one knows that better than Maguire. "If [Aires] doesn't work, we don't fly," he says, just back from a late summer trip to Delhi, India, to check on the system's progress. His mission there was twofold. "First off, I wanted to build a relationship with the developers, let them know who I am, how I think, what my expectations are. I wanted to meet them face-to-face and talk to them about how critical this is to us," Maguire says. "I also went over there to talk to their VPs about where we were with the implementation and changes we'd like to see before going into production. And how they will support us on a 24/7 basis once we're in production." It went well, he says.

But everyone's expecting some turbulence with the implementation. "The reservation system presents the highest risk to the business," says Maguire. The Aires system infrastructure has multiple layers of redundancy to minimize unscheduled outages. But to minimize risk overall, Maguire's team is working closely with Cendant to ensure that performance, stability and scalability are more than adequate to meet Virgin America's load requirements.

"Sabre is a great product, and they've spent millions of dollars putting lots of makeup on that old technology," says Pawlowski. "But they've pushed it as far as they can, and it's time to start thinking about what's next."