Big Data technology is reshaping all industries. Leveraging Big Data insights bring the companies a great competitive advantage. As one of the biggest industries that have access to various kinds of data from multiple sources, how are airlines benefiting from data collection and analysis?
The airline industry has been a customer experience expert (pre-flight &flight) with its successful loyalty programs (airmiles) from the beginning. However we don’t see most of the airlines taking advantage of big data technology yet. They have an access of great data, and with prioritization in data collection and analysis, even smaller airlines could use big data to respond to market trends and customer needs.
Let’s first take a look at some information that airlines and their frequent flyer programs know about us to track, measure and analyze our behavior;
- Search history
- Purchase history
- Checked luggage
- Departure & Arrival date and time
- Destination & Departure city
- In-flight sales/duty free spend
- In-flight food choices
- Hotel, rental car connections
- Number of travelers we fly with
- Credit card points earned
- Miles used
- Our influence over other people through social media
And so on. This might seem a bit creepy, but it is for our best!
And now here are some examples of how the airline industry is using this Big Data we generate, for our best;
Here we are again with Big Data Benefits 101: Personalization. All jokes aside, we all know how tailor-made offers increase customer satisfaction, thus loyalty; which is every company’s ultimate aim. Airline companies are quite lucky when it comes to collecting data from their customers because even a single booking contains various data that can be very beneficial.
Many airlines are using big data to improve the customer experience. For example, United Airlines uses smart “collect, detect, act” system that analyzes 150 variables in a customer profile. Everything from previous purchases to customer priorities is measured in order to present a tailor-made offer. This system has increased United Airlines’ year-over-year revenue by more than 15%.
British Airways also uses a ‘Know Me’ feature to make an in-depth analysis of data for each customer to provide personalized results to them. They say BA’s customers are busy people who don’t have time for irrelevant offers, so this program analyzes customer data to construct relevant and targeted “next best offers” for their consideration. They received expressed pleasure from their customers at BA’s understanding of their air travel needs.
Improving Marketing Efforts
One of the most common ways airlines use big data is to improve their marketing efforts which is basically the next step of personalization. By collecting detailed data from individual customers, airlines present them special offers. As a result, this increases the chances of getting a favorable response which enables airlines to measure how customers think and behave for future marketing activities. For instance an airline can launch promoted flights to Italy when they see more people are looking at traveling there by analyzing trends.
An example from Boxever-a marketing platform for travel industry; one of their clients built a marketing strategy around abandoned carts and then they sent personalized e-mails to those customers. They received subsequent bookings worth of $1 million per week from these communications.
Pricing and Network Strategies
Many airlines go further than a basic data collection and analysis. They can analyze big data such as tracking traveler’s purchase activity, while tracking travel demand patterns from across the globe. If an airline sees the demand for flights from A to B going up, they can alter prices accordingly. They can also determine which customer segments are price sensitive and measure each customer segment’s price range for a given route. EasyJet was invested in an artificial intelligence algorithm that determines seat pricing in real-time depending on demand.
Big Data analytics can take historical information and predicts demands up to a year in advance. It also helps on the decisions on opening new routes, schedule changes and codeshare alliances.
During a flight, excessive amounts of data are generated every second – pilot reports, incident reports, control positions and warning reports etc. When this data is monitored and analyzed wisely, it is possible to improve flight safety.
Southwest Airlines has partnered with NASA to indicate potential safety issues. By using machine-learning algorithms, they have built an automated system capable of crunching vast data sets to warn about anomalies and to prevent potential accidents.
Increasing Customer Satisfaction
- Real-Time Baggage Status: Delta Airlines introduced an application which allows customers to track their bags from their mobile devices. The application is simply using the baggage data that Delta staff uses, however the app has been downloaded by more than 11 million (skeptical) customers.
- Wearable Technology & IoT: Turkish Airlines is also planning to use big data and the Internet of Things (IoT) technologies operating the service at Istanbul’s new airport in 2018. They will use beacons in the new Istanbul airport which will interact with smartphones to assist customers navigate their way to lounges, food and retail and to the boarding gates. In addition to that, customers will be able to save the location of where they park their car and track their children with smart bracelets even when they are flying alone.
- More Insightful Customer Behaviours: Southwest Airlines uses a speech analytics tool that allows customer service representatives to understand the nuances of every recorded customer interaction. They also analyze data from various online channels like social media to receive more information about customers in real-time. As a result of this, different metrics they collect guides service personnel to the best solution in every scenario.
Big Data helps airlines have a better understanding of the individual passenger, identify patterns in his/her behavior, determine preferences and foresee future requests. By leveraging Big Data insights, airlines have the ability to make strategic decisions and differentiate themselves in the extremely competitive market.