Airlines & Analytics | How The Airline Industry Uses Data To Fly Higher

Published on October 21, 2017 - by Softcrylic under Analytics

Characterized by Single Digit Net Profit Margins, Airlines Industry rely on applying a range of Data & Analytics techniques to maximize revenue and reduce operational costs. Minor improvements enabled by Data-driven decision making can significantly boost productivity, customer loyalty and overall bottom-line of Airline Carriers.

To stay ahead of the curve in a highly competitive industry, Airlines leverage a wide range of data and analytics techniques. The end goal is to maximize revenue and reduce costs. As you can see these are big numbers.

1. Cost Reduction

Baggage Management

Airlines are very concerned about baggage handling metrics like lost-bag tally, SLAs. They rely on real-time baggage tracking data to avoid losing damaging or delaying bags and face compliance issues.

US$22 billion – The air transport industry has saved over $22bn in the past nine years, thanks to improvements in baggage handling and a big reduction in lost or mishandled bags.

Yield Management & Pricing

Insights from structured and unstructured data from Internal & external data sources to understand competitive actions, price sensitivity and patterns. Airlines use this to balance profitability and load factor.

US$20 to $30 million – Increase in annual revenue when Airlines use big data and analytics to optimize fares and predict price change.

Fuel Management

Airlines track real-time fuel consumption data on Dashboards from take-off to landing. This monitoring is crucial to be ultra-efficient in reducing fuel costs and airline emissions.

2% to 7% – Reduced fuel consumption annually with data driven Dashboards.

Crew Performance & Ground Handling

Crew Cost is the 2nd largest expense category for Airlines. What-if scenarios, optimized rosters and real-time alerts on crew data behaviour help Airlines improve crew utilization, efficiency and transparency.

US$25 Billion – Airlines and Airports can save annually from flight disruptions by harnessing artificial intelligence, cognitive computing, predictive analytics and other progressive technical capabilities.

Aircraft Maintenance And Reliability

Predictive Analytics helps Airline Carrier in conductive prognostic maintenance. This improves predictability on procuring parts inventory, fleet reliability and reduces huge operational costs.

$7 Million per year – With 500,000 AOG incidents each year, airlines can be exposed to $7 million annually in Aircraft on Ground (AOG) costs.

2. Revenue maximization

Booking analysis

Airlines segment customers, target with personalized offers, optimize pricing in real-time using predictive analytics techniques such as modelling and forecasting.

38 Touchpoints – Travellers visit up to 38 different websites before booking a trip.

Customer Experience Scorecard

Big Data Analytics helps Airlines capture real-time customer behavioural data from multiple touch points and process structured and unstructured data sources to improve overall customer experience.

US$582 million – Will be the ROI in 16 months if a large carrier invests $34 million on customer experience.

Marketing Campaign Analytics

Marketing automation blends with advanced targeting and analytics abilities to analyze channel performance, media spend, goal conversion, campaign performance to improve cross-selling and upselling.

$762 billion – Worldwide Digital Travel sales is predicted to reach $762 billion by 2019.

Loyalty Programs Analysis

Airlines invest a lot in creating data modelling, Balanced Scorecards and retention analytics for tracking Loyalty value and engage passengers with offers in real-time across FFPs and co-brand card programs.

Loyalty programs influence:

  • 64% consumers on where they make purchases.
  • 50% on what they buy.

Brand Buzz / Social Listening

Text Mining & Analysis helps Airlines in proactively understanding customer sentiments, predicting safety and maintenance issues. Valuable insights from this analysis help in improving the bottom-line.

43% of the airline passengers rely on online reviews of different airlines before booking a ticket.

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Softcrylic helps organizations navigate and execute the path of Digital Transformation through IT solutions and services. Since 2000, Softcrylic has worked with both start-ups and Fortune 500 organizations to help make their company goals a reality.

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