While 2012 is likely to feature a variety of dramatic airline news stories, if only because most years in the volatile and hypercompetitive industry beget drama, some of the biggest developments will come from the world’s largest airline, United Continental Holdings Inc. of Chicago.

Behind the scenes, the company will attempt to merge United’s and Continental’s reservation computer systems, a huge and perilous undertaking. It will also be the first North American airline to take delivery of the Boeing 787 Dreamliner, considered a game-changing aircraft for fuel efficiency and passenger comfort. Perhaps most important, the company will roll up its sleeves and try to hammer out labor contracts with several of its unions, including the feisty pilots union that has been highly critical of the airline in recent months.

Developments elsewhere in the airline industry will include American Airlines making its way through bankruptcy protection, potentially cutting some service in Chicago and elsewhere.

There’s also the little matter of the sluggish U.S. and world economies with which the airline industry’s fate is tied. But fliers will also see more cabin amenities, such as Internet access, power supply in seats and high-tech video choices for movies and television shows onboard.

For United Airlines customers, the change they might notice first will come when the company combines its reservation systems.

After the switch, Continental.com will go away, and travelers no longer will be able book flights online there. Continental as an airline technically ceased to exist after the company received Federal Aviation Administration approval on Nov. 30 to operate as a single airline, called United Airlines.

But since then, the company has been operating two airline nameplates, United and Continental, until it can combine behind-the-scenes computer systems that run its bookings. Currently, those computer systems, which are the digital backbone of an airline, run on different brands of incompatible software. Airline officials chose to stick with Continental’s brand of booking software, called SHARES, sold by Hewlett-Packard.

“That’s a very big deal for us because it will make the customer experience better than it is today,” said United Chief Executive Jeff Smisek, who has called United Continental “a technology company with wings.” “It will make our treating of the customers more seamless than it is today, because we have two separate sets of technology, and they don’t talk to each other.”

For example, after the integration all customer service agents will be able to see and use all customer information and make accommodations, such as seat changes, regardless of which airline the passenger booked with, Smisek said.

“That’s a big step for 2012, to get that done,” he said.

It’s not all about software. It’s also about teaching United employees to use it.

“There’s a lot of training going on today because it affects the United folks going to the Continental system of SHARES in the airports,” said Jim Compton, United’s chief revenue officer. “We have a lot of work ahead of us, but we’re moving along and making great progress. From a customer point of view, I know it will be better.”

Such computer switchovers have not always gone smoothly. Virgin America switched to a new reservation system Oct. 28. It was plagued with glitches on its website and airport kiosks. Customers were outraged when they couldn’t change or cancel flights, choose seats or access their frequent-flier accounts. The airline was forced to issue blanket apologies and individual ones via Twitter. It hired extra people to handle all the customer problems.

And US Airways had trouble in 2007 when it merged with America West. During that episode, merging the systems crashed check-in kiosks nationwide.

“It was pretty ugly,” said Seth Kaplan, managing partner of Airline Weekly. “People would show up at the airport and not be able to check in for their flights. And planes were taking off empty because people couldn’t get their boarding passes and get through security.”

Kaplan said reservation system changes are “always a risky endeavor.” The good news is such problems are usually short-lived, and United can take a lesson from the transition of other airlines.

“They have the benefit of learning from what’s happened at all the other airlines that have gone through this exercise and can at least try to mitigate some of the challenges that might come up,” Kaplan said.

United Continental in 2012 is scheduled to be the first North American airline to take delivery of a Boeing 787 Dreamliner, a twin-aisle plane that offers the best fuel economy and range for a craft its size and promises passengers far greater comfort. Smisek has called it a “truly game-changing aircraft.” It’s expected to be in service during the second half of the year, and, all told, United expects to receive six 787s from Chicago-based Boeing Co. in 2012.

“It will be the only U.S. airline flying them for a long time to come,” Kaplan said. “It will be years before anyone else in the U.S. has them.”

Specifically, United claims it will be three years before the competition in North America has a Dreamliner. Boeing delivered the first 787 this year to Japan’s All Nippon Airways, which put it into service this month.

The 787 is said to be the most technically advanced commercial aircraft ever built. The jet’s largely composite structure is lighter and promises greater fuel efficiency, which is a big deal for airlines. If it lives up to expectations, the Dreamliner would burn 20 percent less fuel than other midsize jets but boast the range of far larger aircraft. It would enable carriers to bypass airport hubs and directly connect city pairs that otherwise wouldn’t generate enough passenger traffic to fill bigger jets.

For passengers, the plane has the industry’s largest windows and overhead bins. Quieter and smoother-riding, the aircraft has wider aisles and seats, lower cabin pressure and cleaner air using a filtration system to remove offensive odors. The windows will be dimmable, via electrochromic window shades rather than physical pull-down shades.

Kaplan guesses that United flights in Chicago will eventually get 787s, but the airline’s hub in Houston is likely to get the first several because its market _ mostly business travelers, because Houston isn’t a big tourist destination _ lends itself to the 787’s size and capabilities. The airline will likely want to locate the first few 787s at the same airport because it would be expensive to have maintenance crews trained to work on 787s in multiple locations, Kaplan said. United has not released information about its route schedule for the 787.

Perhaps the biggest challenge for United next year will be successfully negotiating labor contracts with its various unions, including pilots, flight attendants, mechanics, passenger service agents and ramp agents.

The most difficult, and most costly, will likely be the pilots contract. The two sides have been negotiating for more than a year. Pilots, looking to recoup pay and benefits they lost in United’s bankruptcy from 2002 to 2006, have regularly staged informational pickets about not having a new contract. The Air Lines Pilots Association filed a federal lawsuit against United, complaining about poor cockpit training, although labor officials said the suit was about safety, not their labor contract. The union lost that suit.

“I certainly wouldn’t bet a lot of money on it getting done in 2012,” Kaplan said of the pilots contract. “They certainly don’t seem any closer now than when the companies merged. If anything, they seem further apart.”

The company would receive financial benefits in having a joint pilots contract. It would allow the airline to mix United and Continental pilots in the same cockpits to achieve efficiencies, which can’t happen now. And there’s an intangible benefit to having harmony between pilots and management. The problem is, the unions, especially pilots, might ask for so much that the total cost would far surpass any efficiency savings the company would reap.

“If it will costs hundreds of millions of dollars in (pay) raises in exchange for tens of millions of dollars in cost savings, for example, the airline will probably just hold out,” Kaplan said. “They’re not giving the pilots a blank check.”

Smisek said the company wants to seal deals with all the unions, including pilots.

“We’re very committed to getting a deal with the pilots, but it has to be fair,” Smisek said. “I will not do it if it’s not fair to the company and fair to the co-workers. When we get to the point where we can reach such a deal, we will.”

US Airways hasn’t reached that point. It merged with America West Airlines more than six years ago and still hasn’t struck a joint deal with the pilots union.

“There’s precedent for these things getting really drawn out,” Kaplan said. “What US Airways has shown is it’s possible to run an airline without getting the groups together.”

Another factor is that United and Continental airlines were so large on their own that maintaining two sets of pilots, for example, in a merged company isn’t as inefficient as it would be with a smaller airline.

“They have scale on both sides to the point where they can manage this way if they have to, even if that wouldn’t be their preference,” Kaplan said.

The recent bankruptcy of American Airlines, which is likely to see the airline significantly lower its labor costs, could also have an effect on United’s stance with unions.

“United might be in a position to say to its workers, ‘Look, we just can’t give you what you’re asking because that would make us totally uncompetitive against this important competitor that now has much lower costs,’” Kaplan said.

___

Newsletter