‘Big Data’ was a buzzword of choice at the CAPA Asia Aviation Summit in Singapore recently.
A panel, moderated by Stephen Pearse (managing director of CAPA – Centre for Aviation), explored what embracing big data could mean for the aviation industry going forward and anticipated what barriers could stop a new data analytics practice from taking off.
Often a vague term that loosely refers to the endless spools of information that currently sits under-utilised, ‘big data’ represents the infinite insights that airlines (or any company, for that matter) are keen on harnessing to revolutionise and evolve how they conduct their business.
Andrew Cowen (CEO, HK Express) shared that he believed there are two primary benefits arising out of understanding how to harness big data to an airline’s advantage.
Firstly, it would vastly improve basic business efficiency, moving away from legacy systems that still require manual input of data into spreadsheets.
The second benefit is how it would enable airlines to shape and engage with consumer identities much more holistically. However, he was careful to point out that while big data could reveal unique consumer preferences, it’s a fine line to invading privacy.
Drawing on Cowen’s point that vast pools of data within the airline industry are poorly managed, John Chapman (head of sales & business development, Sabre Airline Solutions APAC) made the case that this is partly because data exists in different silos and are not collated effectively within any company.
“We need to bring it all together and in a single environment, keep it up to date and in real time so that it can be used immediately with individual customers as well as when there is a disruption of services.”
It echoed much of what Cowen had said prior, in that improving operational efficiency was necessary to ensure the data is used optimally.
“Start from the data, not the processes”
Didier Mamma (global head of sales & commercial travel intelligence, Amadeus IT Group) argued that in fact the data is what will essentially change how the business operates and not the other way around.
“We need to start from the data, not from the process,” said Mamma. Corporations need to question what the data is able to tell you and how that can then be harnessed to develop smarter processes.
“You need to define everything, it’s completely the opposite way… Instead of using processes, you’re going to use patterns. The guy who will then identify the patterns will be the data scientist. You need to hire these skills in your company. It will be a race to get these qualified people on board. If you want to transform your business model with data, you’re going to need a handful of [people] like this in your company.”
Understanding how to use the data effectively is in itself a learning process. “You need to experiment, try, fail, try, succeed” to figure out what the data can actually tell you, reminded Mamma.
Jonathan Hardy (VP sales Asia, ADARA) said that fortunately, “the travel industry is so well placed… to attain advantage of big data. So much of the planning and transaction happens online.”
He echoed the earlier points that the key trick would be to figure out how to make the data actionable by collecting data across the entire travel industry, e.g. from airlines, hotels, OTAs.
It’s not about building a giant data lab, it’s about understanding what it’s for
Mamma interjected to say that Amadeus had been doing things this way for the past 10 years but ultimately “it doesn’t work… this is very important to understand. You cannot use the technology we had 10 years ago, you need completely brand new technology.
“We talk about structured data but unstructured data is much more important. When it comes to defining how a customer will behave, you have more information on the unstructured data e.g. through social networks… but you need to have those different technologies. It needs to be well understood that it’s not about building a giant data lab.”
Fundamentally, handling big data will require far more than straightforward investment in big data but an acute awareness of what it will be directed towards. Ilya Gutlin (president, SITA APAC) cited a report where 95% of airlines said they would invest into business intelligence for sales and marketing, 88% for operational awareness and 82% for passenger experience.
Gutlin pointed out these three dimensions as “the big buckets” when it comes to making large-scale changes to how an airline operates. For example, SITA has embraced data to develop predictive analytics i.e. being able to deal with the movements of passengers and planes. The second is potentially personalisation i.e. being able to deal with each passenger in a much more personal way.
For SITA, airports are prime fields to gather passenger data. For example, beacon technology through passenger mobiles is used to collect data. Gutlin emphasised the power of mobile in being able to provide customer information “but also feed [back into] big data.”
The risks and rewards
Yet, there are inevitably risks that come with the act of sharing information. Is the industry ready to embrace such a vast body of information?
“Many customers don’t know what data they have. They need to figure out what data than can use and what they can access or even create. On a smartphone, we have [multiple] ways of tracking exactly what the customer is doing, how he’s doing it and when,” said Mamma.
“The young generation doesn’t think [the same way]… that’s very important when we think about customer segmentation. They are just interested in the service they can get. If you are able to deliver a good service, they will use it. That’s the way to use big data. It’s all about computing access in real time,” Mamma continued.
Chapman concurred by saying that big data would feed into understanding “who is our customer and not just tracking our segmented route… That’s the biggest ability we have today that we didn’t have. Then of course from the operational side, we’d have a lot more business data.”
Chapman noted that LCCs were particularly well placed to make fast moves in this area as they began operations with much newer technology, skipping over complexities associated with legacy systems.
With regards to actually operationalising big data, Gutlin said “I don’t think it’s years away, a lot of it can be done now… and as [Chapman] says, LCCs have been doing it for quite some time.”
Cowen identified that while having the information was all well and good, a critical consideration would be how it is made accessible and relevant to those who need to use it, whether they be corporate or ground control staff.
When it comes down to it, CEOs need to express a commitment to pursuing big data as a method of reshaping the operations of the company. Then from there, it is equally as important that companies invest in both the technology and skills to be able to use it.
“You need to define and test the business case across three dimensions. Is it feasible? Will the application interest my customer? Can I monetise it?” said Mamma. “Do it quickly, you don’t want to spend time because business is flying… what the market will need in two years is completely different.”
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