UPDATE: Forrester Research principal travel analyst Henry Harteveldt says the lack of a definite agreement between American Airlines and HP for development of the Jetstream host system "raises concerns."
Harteveldt says he would have surmised that the transition from signing a letter of intent in August to reaching a definitive agreement would have been completed by now because American Airlines is known to be very carefully about going public with these sorts of preliminary agreements unless there is a strong expectation that the basic terms are wrapped up. Ninety to 120 days typically is an adequate period to move from a letter of intent to a final agreement, Harteveldt says, although he acknowledges that the scope of a host system transition can be a different animal.
The Forrester analyst speculates that perhaps the two parties may have disagreements about the capital investment, pricing, intellectual property rights and/or the technology, or perhaps HP is finding that American may be "a difficult potential client."
However, reaching an agreement is critical for HP because it needs a "first-tier" airline client for Jetstream, and American is HP's first known client for the as-yet-to-be built product, Harteveldt says.
The original post follows:
Some five months after American Airlines' parent company AMR Corp. signed a letter of intent with HP for it to develop a new passenger service system, Jetstream, for the airline, AMR chairman and CEO Gerard Arpey said Jan. 20 that the two parties have yet to sign a definitive agreement.
During AMR Corp.'s conference call about its fourth quarter 2009 earnings, in which the airline recorded a net loss of $344 million, Arpey said that the two parties have held detailed conversations about a definitive agreement, but haven't "pushed it over the finish line."
Arpey said AMR Corp. expects to reach a definitive agreement with HP in the "near future."
HP's Jetstream, which would host American Airlines' internal reservations system, would replace Sabre as the airline's host system.
Airline reservations systems transitions usually are prolonged and extremely complex.
That apparently holds true even for reaching a definitive agreement between HP and American Airlines.
HP declined to comment on the issue.
In other news, American said it would aggressively contest any JAL-Delta Air Lines alliance and said AA's offer to JAL was a "no-brainer.
Also, an official stated that American felt no appreciable financial impact from the Christmas Day Northwest Airlines terrorism incident.