SM: The Airlines had huge optimization problems.
JK: They really did. In fact, there was a huge optimization problem on every front; how to set capital, prices, routes, seats, everything. I joined American Airlines in 1980, and over the course of 17 years at American Airlines I got sucked from one role to the next. I started off in operations research, and then because I could communicate and use a calculator, I was put into ever more responsible positions.
Later, I was made an officer in the company and put in charge of the Saber network. The mission there was to globalize the company and get it ready for an IPO which we did in 1995. At the same time, that was when the web first showed itself commercially. We then began to web enable all of these big old legacy applications. We put PCs out in the world and we began to shift the code so that most of it became services pushed to network PC applications or web browser based applications. Over the years, I was involved in some form of technology; either the application of it to solve a particular business problem, or the implementation of it to create some kind of service or do some kind of job.
SM: How did Orbitz find you?
JK: In 1995 or 1996 we had an application at Saber called EasySaber. It was a conventional dial-up online service where the average consumer could dial up and use the travel agency Saber system. It had fairly simple command system functions; you could put in a command and get an answer back. One of my colleagues at the time wanted to take this application and launch it as an internet service. It became Travelocity. I left shortly thereafter to go run Swiss Air.
Expedia started more or less at the same time as Travelocity. I had been working in Europe, and four years later in 2000, the airlines could see that these web businesses, Travelocity and Expedia, were becoming very large and they could tell from their own websites that the web was going to be huge and very important. Their chief concern at the time was they could envision their marketplace going from 30,000 fragmented and harmless travel agents into two giant internet travel agents; one owned by Microsoft, and the other owned by Saber.