What does the introduction of analytics mean for the future of air travel?
Despite the recent growth in homegrown holidays, air travel is still big business in 2017. As more people look abroad for business and pleasure, airlines have to become savvier if they want to find an edge up on competitors.
Increased competition has made it more important than ever for companies to embrace new technology. The only problem? The biggest development in modern air travel technology is still only being embraced by a handful of companies. Big data has the potential to revolutionise every aspect of air travel – from the second a customer searches for their next holiday to the moment they touch down.
Processing the data
With the reams of data generated daily by the travel and hospitality industries, there’s no end to the number of consumer measurables that can be tracked and observed, including reservations, enquiries, itineraries, rental cars, fare charts, geolocation and customer feedback. With so many airlines competing for the same passengers, the data gathered from these variables is essential to enhancing consumer value and retaining customer loyalty. The airline industry’s approach to customer feedback has evolved because big data has dramatically increased the level of feedback available. With a constant stream of data on customer behaviour, airlines can leverage the insights gained from analysing the data to improve the entire passenger experience.
Traditional manual fare analysis is now a thing of the past for most airlines, replaced by automated data gathering and the analysis of existing and real-time data from multiple sources. With this data-gathering, airlines can track competitors pricing and combine sources to build a comprehensive pricing strategy. Similarly, this data can feed into algorithms which track price changes and predict potential upcoming changes to ticket prices.
Dynamic analysis of competitors’ pricing enables service providers to remain competitive at all times. These metrics allow travel sites to forecast changes in pricing over time for better serving their consumer requirements. By analysing data collected from on-site forms, social media platforms and call centre conversations, airlines can identify customer intent with a greater degree of accuracy.
Likewise, by studying the numbers behind customer purchase patterns, drop-off and click-through rates, companies can build a coherent and responsive commercial strategy that is easily adapted in real time as needs develop.
The booking process
Most established travel companies have already begun utilising data in its commercial applications – identifying customers through the booking process and sending them targeted location-based offers. But by studying passenger’s browsing behaviour during the booking stage, airlines can also gain ancillary revenue from offering secondary services from recognised commercial partners.
These services can include partner company-specific deals and cover a huge range of possibilities, including providing options for car hire when they land, linking to local SIM cards to reduce their roaming charges or offering discount rates on day-trips. As Abhishek Singh, product manager for tourism and hospitality at Infosys, explains:
“Ancillary revenue should not just be about baggage fees or unbundling, but should aim to create value propositions based on increasingly real-time information about customer preferences and needs and using that information for targeted services.”
It’s not just the booking process that provides opportunities for data-gathering. Checking in, and the multitude variables that can come with this process also provides airlines with valuable insights. Big data analytics allow travel companies to understand their customer, and studying check-in data can enable them to optimise the experience and streamline the boarding process.
With this relatively new level of insight, travel companies are now determined to leverage data into a streamlined travel experience. After all, passengers won’t book with an airline again if they’re left high and dry at the check-in desk. Building a snapshot of ‘customer DNA’ enables airlines to account for potential delays (for instance, by offering a hotel room suited to their particular needs), provide customised airport lounge services and even suggest the best routes to the airport at any particular time.
One of the biggest challenges for airlines is in keeping track of the millions of pieces of luggage that go through airports every day. After over half a century of air travel, the process of ensuring the right bag ends up at the right destination in the right hands has been sufficiently refined, but until the arrival of big data in aviation, reassuring passengers of the whereabouts of their luggage is another matter.
Delta airlines were one of the first companies to provide an application allowing passengers to track their luggage from their mobile devices. Although a relatively simple concept, providing that additional level of transparency endears passengers to the brand and gives them peace of mind in the process.
Customers expect travel solutions tailored to their specific needs – big data provides the means to do that. Gone are the days of travel companies forming their commercial strategies from the aggregated feedback of a small cross-section of the customer base. Today, commercial air travel enjoys access to a near-bottomless well of information from which to dredge new observations. Companies can now gather data from almost every stage of the travel process, and those that do are in the best position to respond to changes in customer expectations.
In studying the data generated by a potential passenger’s holiday planning, incorporating price search and comparison process, booking, cancellation, and feedback, airlines can build a detailed picture of their customer’s interests and, more importantly, their needs.
Service providers can also track their customers and make location relevant real-time offers by enabling GPS technology with data analytics. In Brazil, where aviation traffic has been growing rapidly, airports introduced a GPS system that analyzes data from flights to optimise travel space and prevent unnecessary ‘bunching’ of flights. The system has already been credited with reducing the time planes spend in the air, optimising flight times and reducing fuel consumption. Airlines and airports alike are now harnessing data as a means of assigning ‘value-scores’ to flights, enabling them to prioritise flights in the event they need to be diverted
With increased connectivity and flight-tracking technology, airlines now have the opportunity to optimise not just journey times but vehicle performance too. By incorporating weather data into the flight plan, airlines can anticipate potential weather hazards and adapt accordingly. For commercial airlines, this means simultaneously saving money on fuel and reducing the corporate carbon footprint.
For commercial flights, combining historical data like dieting and seating requirements, with real-time information is already an integral part of the travel experience. Big data, however, makes studying the needs of your passengers easier and far less invasive than the traditional ‘in-flight questionnaire’.
Just as data gained from the booking process can guide subsequent offers from strategic partnerships, airlines with onboard WiFi can study the analytics of individual passenger’s in-flight browsing and push personalised advertising accordingly. It’s a win-win for everyone; it increases ancillary revenue and brand loyalty for the airline while providing a more personalised experience for the passenger.
Big data in aviation is still in its infancy despite the industry being one of its earliest proponents. The airline industry can be a fickle place, with customers inclined to jump between brands according to who has the cheapest flights. That’s why responding to feedback and keeping prices in-line with the competition is so essential. Integrating the responses found in big data is the most effective means of turning this feedback into real actionable insights. The airlines ready to embrace the power of quantified feedback into their commercial strategy now will be at the forefront of new data developments.