Radixx Malware Attack and How to Avoid Distribution Havoc in the Future
As if a pandemic shattering demand for air travel was not enough, last week aviation headlines were centered on another chaotic event for about 20 airlines: due to a malware attack, the systems of Radixx, a Sabre (SABR)-owned company that offers budget solutions mostly to low-cost airlines, had to shut down temporarily.
The most echoed effect was on U.S. startup Avelo Air; the outage shut down its system on April 21, exactly seven days before its first revenue operation, and it extended for three days. That is, while the airline needed the most to gain traction and brand awareness, with its introductory fares.
Avelo spent three days, from April 21 to the 24th, with practically no revenue at a critical time for its startup.
Nevertheless, it was also critical for all other airlines affected, which are scraping to capture all possible revenue as they fight for survival in the current depressed demand market.
The Associated Press reported that South Africa’s FlySafair had to create a “mini booking platform” to address the issue, while Vietnam’s Vietravel Airlines, founded just last year, maintained only sales at its airport counters.
Inquired by Cranky Flier blog upon the airline’s first flight, Avelo’s CEO, Andrew L
evy, said the happening was “not ideal for sure”, and expressed his dissatisfaction with its provider. He also said that the problem was not 100% solved, although sales were back at that point.
Additionally, the executive said that the airline currently runs a Radixx booking engine, while it expects it to have its own “by the end of this year”.
Source: Avelo Airlines
While such a comprehensive outage is mostly unprecedented, raising eyebrows through all system providers of the industry, this should attract the attention of the management levels of most airlines (and especially those considering to change systems) regarding their booking and back office systems, the risk management and back up procedures.
“Airlines are notorious for using outdated systems built on outdated platforms built on outdated infrastructure following outdated processes. Now is the opportunity for airlines to modernize, with parallel risk management.” - Shakeel Adam, managing director of Aviado Partners Advisory Services, a global aviation consultancy,
Although Radixx’s problem might seem isolated, it is worth recalling that the company is a full subsidiary of the almighty Sabre, a multibillion-dollar provider that works with dozens of major airlines globally.
In fact, Sabre acquired Radixx in 2019 for $107 million with an eye on capturing more of the low-cost carrier and start-up market. The intention, according to its latest 10-K filing, was to “expand [Radixx’s] capabilities and expect to make additional investments to address the LCC space and continue to grow upmarket with a more competitive offering.” The statement, however, hints that the subsidiary would cater as an option to companies that do not require GDS services at their current scale, but that could want to upscale in the future.
That is to say, one would be an entry-level service, with a simpler interface and thus cheaper costs and pricing for airlines, thinking of a future upgrade by customers into more comprehensive booking systems.
Due to being distinct platforms, the malware attack attributed to the blackout did not reach Sabre, but it raises various questions including: is betting on a cheaper system worth it?
There is not a definitive answer. Obviously airlines do not have the means to develop a fully in-house direct sales system. In fact, if the structure is already set up by the existing companies, it would be by all means pointless -- from Ryanair to Lufthansa, airlines all rely on a provider one way or the other. Outsourcing sales and reservation systems, at least partially, is industry standard even for startups and small airlines because such providers provide more stability than an inhouse system.
It is easy for critics to suggest that airlines should not have trusted a system with lower costs and of a smaller reputation, while avoiding the world-renowned, more expensive regular systems that are used by millions of customers everyday almost always seamlessly. However, for startups and upcoming low-costs, maintaining a cost advantage, versus the established, scaled airlines is not a matter of choice. And this is exactly the service these smaller companies, like Radixx, offer. They are critical for the development of smaller and startup airlines.
As Levy pondered to Cranky Flier during his interview, the company outsourced its booking engine to a Radixx product because, albeit a “limited [product] in terms of what you can and can’t do,” the airline’s priority “was to get going quickly. We felt we had a professional product we could put out there even though it’s not ideal.”
This is exactly why airlines might -- and in many cases should -- keep trusting small-scale, budget system providers; it only makes sense from a time and a financial perspective. Even more so now, as after this huge public issue, providers should reinforce their safety nets so problems like this do not happen again.
“The industry needs smaller and more nimble solutions. Radixx and its competitors are critical for industry development.”
