How airlines are evolving in their data journey

Airlines are beginning to get on top of data and the value it can provide from general operational efficiency to personalisation for passengers.

International Airlines Group, parent company of Aer Lingus, British Airways and Iberia, says data contributed €170 million to the business last year.

IAG chief executive Willie Walsh says the group is beginning to “actually get value out of it and do something smart with it.”

He was speaking at the CAPA conference in Dublin earlier this month and believes the way to approach data is to think in terms of how it can be used to solve problems in the business.

“We know we have problems in our business so how can we fix them in as rich a way as possible.”

He points to credit card fraud as a good example, with people trying to manually get a handle on what’s happening.

“Machines can identify patterns, analyse hundreds and thousands of transactions and quickly assess whether there is something that needs to be looked at.”

Walsh says IAG is looking to “harness that opportunity and power”.

Questioned on whether the group has moved on from the traditional silo approach of airlines, he claims says the company already knows its customers better.

“We know 53 million of our customers. We have sufficient data to be able to personalise the approach to them.

“That’s not saying we’re at a level of getting value out of that or giving value out of that but what we saw in 2016 is that knowledge or wisdom from data contributed about Euro. 170 million to our business and we can measure that, where it has made a difference.”

He adds that the group is just touching the surface but that the “potential is huge, based on what we’ve seen so far”.

According to Walsh, the Euro 170 million is about 1% of the group’s passenger revenue.

“That 1% is going to make a huge difference and this year that could be 2%.Within a few years it could be 40% of our passenger revenue.

“It could be contributing really significant sums of money if we get it right. That’s the opportunity, that’s the beauty of it. We haven’t fully exploited all this information yet but we will.”

He also warns the industry to be careful however in terms of how it uses data to personalise.

He says so often companies get it wrong with elements as simple as customers’ names. Walsh says the group’s tentative approach to personalisation is “probably slowing the pace at which we move” but says it needs to be handled very carefully.

“We’re making sure we do this in a way that doesn’t turn the customer off and turns the customer to us rather than away from us.”

EasyJet group director for strategy and network Cath Lynn also says the airline’s approach to data has evolved with much more thought given to how the data is treated and stored.

She says there is no knowing what connections the airline may be able to make out of the data going forward. Lynn describes each individual item as a “gem” and it’s about how you “put them together to create a beautiful jewel.”

“It’s not for me to know what it will look like in two or three years time. What I need to know is that I’m storing those invaluable ingredients that will enable me to derive value.”

She also says the carrier is looking at how data can now be employed across the whole organisation from engineering and operations to customer relationship management.

Both airline executives were also quizzed on how to keep up with the likes of Google and Amazon.

Lynn says it’s about having people within the business with a mindset that understands where the value lies.

She acknowledges that the carrier will not be able to do it on its own hence its partnership with organisations such as Founders Factory.

IAG also ran the Hangar 51 accelerator over the last six months (it later invested in a number of startups), with Walsh describing the dynamics as “brilliant”.

“We identified projects for them to work on. The ‘smart’ people in the business thought they would come back two weeks later and give up.

“Within two hours they were coming back saying ‘here’s the answer, where’s the next problem.’ It was incredible.

“A large organisation operates at a pace that is glacial compared to some of these new things and being able to bridge that gap requires a change in attitude.”

NB: Reporter’s attendance at the event was supported by Travelport.

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About the Writer :: Linda Fox

Linda Fox is managing editor for Tnooz. For the past decade years she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine.

In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management and research companies.

Prior to her freelance career she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.

 

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  1. Matthew Walker

    Linda, is this too little too late? Has Google et al already filled the gap.

     
 
 

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