Reaching for the sky: How airlines can unlock the potential of big data 

By Natasha Kwan, Managing Director, Asia South

Natasha Kwan

Big data analytics is already at the forefront of the aviation sector, and will continue shaping the way airlines manage customers and business processes. In a recent study, 61 percent of aviation companies cited big data analytics as their top business priority[1].

Yet, a familiar conundrum voiced by many aviation players—especially those making their first forays into big data—is figuring out the best way of managing and analyzing massive quantities of data. Indeed, airlines have much to learn still from other industries, such as retail, in unlocking the value of big data to develop innovative business practices and forge competitive advantages in a fast-paced business environment.

Germany’s Otto Group has big ambitions for integrating innovative, data-driven business models into its existing processes. The retail giant implemented predictive analytics software to capture 300 million data sets from social media, every single week.

By integrating this information with 135 GB of historical data on customers and their preferences, Otto managed to improve demand forecasts for over 100,000 items per day. The IT department can now provide procurement staff with more than one billion predictions, of which 89 percent are accurate—a remarkable transformation, considering the previous forecasts for 63 percent of Otto’s products were off-the-mark by a margin of 20 percent or more.

Destination: Greater efficiency, more satisfied customers

The good news is: the aviation industry generates huge amounts of valuable data across many different processes on a daily basis—with the potential for airlines to reap myriad benefits out of the vast data volumes. Here, I would like to focus on how a data-driven approach can enhance strategic decision-making for airlines in two key aspects: optimizing core operational processes, and reinventing customer engagement.

First, let’s consider how airlines can leverage big data to gain greater business visibility and improve operational efficiencies.

The latest generation of aircraft, such as the Boeing 787 Dreamliner, produces several terabytes of data on each flight[2] that could be potentially tapped to optimize flight paths, streamline maintenance operations and reduce fuel consumption. Data analytics can also be used to make more accurate prediction of flight arrivals, which is crucial as flight delays can result in cost overruns for airlines and airport operators who are already operating on very thin margins.

Secondly, major airlines are exploring how to integrate and make use of data collected across disparate systems to stay competitive and create more dynamic passenger experiences. Price optimization is an important market strategy for aviation players, considering how flight reservations can be prone to seasonal demand fluctuation. Demand volatility remains a prevalent challenge in the travel sector, and airlines can leverage aggregated customer data—captured across the travel value chain, from online reservation systems to social networks—to deliver tailored promotional airfares.

In the face of growing competition, real-time consumer insights are critical to enable airlines to deliver more personalized customer services based on passengers’ past preferences, as well as maximize revenues from ancillary services such as priority seat bookings and car rental.

Implementing a successful big data strategy

Big data certainly isn’t just hype, and airlines need to start adopting new tools and fresh ways of thinking about their big data implementation. The key here is to derive better predictions, faster decisions—in order to streamline operations, better understand customers, and ultimately boost profitability.

To achieve this, airline businesses first need to embrace a more holistic view and build a complete big data “ecosystem”, encompassing high-performance storage, a dynamic cloud infrastructure, and in-memory computing capabilities.

Challenges associated with managing big data solution typically come down to concerns about having the bandwidth capacity and analytics tools to handle multiple data streams, gathered from a variety of touch points. At the same time, you need to take into consideration that there are many data silos in aviation, sitting on both the operational and customer-facing sides, and these disparate systems and data sources need to be effectively harmonized.

By providing both the cloud platform and advanced data analytic solutions on a scalable ‘pay-as-you go’ model, T-Systems can support aviation businesses to develop a solid foundation for data mining, without the need for upfront investment.

Our approach also involves developing the capabilities to process massive data volumes in the fastest and most efficient manner, thanks to the rapid maturation of technologies such as Hadoop. In the retail space, for instance, T-Systems supported Otto in the implementation of Hadoop clusters alongside its existing data-warehousing solutions, enabling the retailer to transform their front-end processes and pave the way for unique customer experiences. What’s more, Otto has outlined plans to tailor product offerings to each customer, based on the Hadoop platform, to deliver personalized suggestions to online shoppers the moment they log on.

I envision a bright future for airlines that are similarly harnessing big data to adapt to the changing demands of the air travel industry17769_56110_A3_(CMYK)_2016-11-30 (LR)


[1] Forbes, 84% Of Enterprises See Big Data Analytics Changing Their Industries’ Competitive Landscapes In The Next Year, October 2014

[2] Wikibon, The Industrial Internet and Big Data Analytics: Opportunities and Challenges, September 2013

How aging IT systems can lead to customer dissatisfaction

By Kelvin Tan, Solutions Consultant, Asia South

Kelvin Tan

Consumers today are mobile, well-informed and connected at all times—and they expect businesses to respond quickly to their needs. Nowhere is this truer than in the airlines industry, where achieving customer intimacy requires every employee, from the cabin crew to the ground service staff, to respond in real time and keep up with rising expectations in service quality.

An emerging trend is how airlines are increasingly managing customer relationships via multiple channels such as social networks. Instead of contacting call centers to lodge a complaint, customers may simply choose to post a negative comment via social media or put up service feedback on travel-related sites. It has been estimated that up to 94% of airlines are planning to deliver customer services via social media[1].

Making the leap to greater customer proximity

This scenario is nothing new. Commercial airlines understand that achieving customer satisfaction is tied to their ability to adapt quickly to a new business environment, and stand out from the crowded skies. A good example is Southwest Airlines, which recently joined the ranks of a growing number of airlines that have deployed social media “command centers” to proactively address customer complaints[2].

At T-Systems, we have coined a term to describe this ultimate vision of customer intimacy: achieving Zero Distance between the customer and the business. It’s a vision that is shared by many of our clients across different market segments, including the aviation sector.

Technologies such as social media, mobility, and digital marketing automation serve as key enablers for achieving Zero Distance between customers and businesses. Companies that fail to make a successful transition to these new technologies are going to run up against the laws of what’s known as “Digital Darwinism”—what happens when technology and society change faster than businesses are able to adapt.

Consider how a lumbering data center made up of patchwork IT systems can prevent important customer information from flowing smoothly between departments—which, in turn, leads to frontline airline staff not being able to collaborate with one another to respond to customer requests in a timely manner.

The end result is extinction, just like in the natural world.

Building a strong foundation for effective collaboration

To avoid this fate, airlines need to nail down a collaborative IT strategy that brings together both front-end and back-end systems to improve internal processes, as well as to adapt quickly to market trends and fast-changing customer behavior.

Guided by our Zero Distance philosophy, T-Systems is able to support airlines in the following steps of their transformation to customer-centric collaboration:

  1. Merging heterogeneous IT systems on an all-IP platform – Establishing an all-IP platform for voice, data and video applications has become a prerequisite for effective collaboration, especially in terms of facilitating seamless exchange of information across different time zones and locations. The latest IP-based unified communications (UC) platforms, designed to run on both mobile devices and legacy phone systems, enable airline employees to contact colleagues who can assist them immediately when a problem occurs.
  1. Centralized provisioning of data and applications via the cloud – Cloud technology offers the possibility to make disparate systems available uniformly and to share information centrally, which is an important consideration for airline operations that are spread across diverse geographical locations. Take the example of a booking office in Munich needing to collaborate with its counterparts to address the concerns of a passenger boarding a flight from Singapore to Amsterdam—but only if all the relevant information can be found in the right place, and accessed through a common platform.

The scalability of cloud solutions is another key feature that aids collaboration. For instance, virtual desktop solutions can be readily deployed via the cloud to enable ground service staff to access their data and applications from any device, to meet the “anytime, anywhere” expectations of customers.

  1. Enabling the provision of security levels – Security and data protection remain key concerns for enterprises moving to the cloud. Especially when it comes to acquiring external cloud services, airlines should always consider a proven and reliable provider who is able to meet diverse compliance and security requirements. Data centers operated by companies like T-Systems adhere to some of the industry’s strictest security and data protection criteria.
  1. Integrating collaborative functions across different workflow processes – Seamless collaboration can only be realized when all functions and data are available quickly and securely, independent of the terminal and location. The need for integrated systems to improve the flow of data, for instance, is an important factor in enabling airlines to ensure flight punctuality and maintain high customer service standards.

I am confident that these new collaborative capabilities can add a whole new dimension to managing customer interaction in the digital age—and help position your organization as a forward-looking airline, able to respond swiftly to customer demands and market trends.

Are you ready to make the leap?

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[1] SITA Airport IT Trends Survey 2013

[2] Houston Chronicle, Staying social is key to Southwest Airlines’ strategy, September 2014