Airline Data Trends and Best Practices

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Airline Data Trends and Best Practices – Oct 2013 1
Organised in co-operation with
LEAD SPONSOR
Airline data trends and best practices
Rod Berger, Bergmen Consulting
Airline and Travel Payment Summit 2013

Confidential & Proprietary
Airline Data Trends
and Best Practices
Big Data can help airlines outperform.
Rod Berger
10/30/2013

Our philosophy:
Be frank,
clear, and
move forward
We call it:
We help airlines bring
technology projects
to the finish line.
We offer IT strategy and
project management services.
Our consultants have worked with:Rod Berger
Founder and President
r.berger@bergmenconsulting.com
•  Over 10 years of IT leadership.
•  Successfully led large IT
programs at airlines.
•  MBA and MS in Computer
Science.
BK Adarsh
Director, Airline IT Delivery
b.adarsh@bergmenconsulting.com
•  Over 13 years of IT strategy
and management within
airline/travel industry.
•  E-commerce expertise.
•  MSc in Computer Engineering. …
bergmenconsulting.com
info@bergmenconsulting.com | +1 888 801 2374
follow us on LinkedIn: in.bergmenconsulting.com

Agenda
§  Appetite for data
§  Big Data is not new, it was just out of reach
§  New technologies bridged the gap
§  Endless ways to use endless data
§  Our 5 recommendations

When a decision
is difficult
to make
it means you
need more
data.
New option:
Dinner +
Movie
Dinner party or
movie night?
Who is coming?
What is on the
menu?
What movie?
Which theater?
Enough
support to
decide
What time does the
more start?
Imagecourtesyof
SalvatoreVuono/FreeDigitalPhotos.net

Clearly airlines and other organizations
have developed an appetite for data.
The good news, is that data is huge and
everywhere.
Worldwide information volume is
growing at least 59% annually.
70-85% of it is unstructured...
Source: according to Gartner, June 2011

§ Revenue
transactions
§ Customer
demographics § Weather data
§ Web traffic
§ Mobile
traffic
§ Competitive landscape
§  Social network activities
§ Photos
§ Videos
§ Customer behaviors
§ Customer locations
§ Standard
yield curves
§ Text messages
§ Audio feeds
§ Social
network
stats
§ Sensor data
§ Clickstreams
§ Health information
§ Economic data
§ Publications
“Classic” Data
Gigabytes
Mostly internal
Structured
Big Data
Petabytes
High speed
Mostly external
Structured
to Unstructured
Big data has
been around
for a while,
it was just
inaccessible

Open door to
high Volume,
high Velocity,
high Variety
Distributed file systems
NoSQL Databases
Virtualization
§  Data and jobs are distributed across
machines.
§  More computing power to manipulate
massive data sets.
§  Reliable and robust.
§  Non-relational
databases.
§  Hieratical, nested data.
§  Data is stored quicker.
§  Scalable and flexible
infrastructure.
§  Provides on-demand power, and
redundancy.
3 key technologies
have converged to
make Big Data
accessible.
DATA

Big data has heavily shaken the
landscape of solution providers.
§  Different game, different
players.
§  New database players.
§  Oracle is taking a hit. 41%*
market share of traditional
databases (in 2011).
§  Open-source solutions are
more and more accepted as
enterprise solutions.
§  Margins are shrinking.
*Source: www.oracle.com

The data menu
is expanding,
also because
there are
benefits in
exposing
data.
§  Enter the business of selling
data, and generate new revenue
streams.
§  Integrate vertically with other
organizations to streamline
processes and/or develop new
offers. Think about NDC.
§  Crowdsource app development to
leverage external talent while
refocusing on core business
activities, and skipping costs.
§  Help science and other
universally-beneficial researches.
Public large data sets are now
available in the cloud.
Image courtesy of
posterize/FreeDigitalPhotos.net

Big Data has gained tremendous interest
over the last 2 years.
0
20
40
60
80
100
120
big data
data warehousing
2004 2006 2008 2010 2012
They have invested in
Big Data (random
selection):
Relative interest
Source: data queried on Google, www.google.com/trends/
Note: Data Warehousing is used here to
extrapolate interest in “traditional”
data.
Attention is shifting
from “traditional” data
to Big Data.

Is Data Warehousing dead?
§  The concept of creating a hub of trusted data to
support business decisions is timeless.
§  Big data is another source of insights. Big Data
comes as a add-on to the hub.
§  It requires different technologies. Traditional
databases are not designed to handle the high
Volume, Velocity and Variety (referred as 3 V’s) of
Big Data.
§  EDW solutions are mature and trusted. Is there a
gain in migrating from one technology to another?

1/2
undertook
Big Data
initiatives
out of 1.2K
organizations
surveyed late 2012
13
$10M
$25M
All Companies Travel/Hospitality/Airlines
Average spending on
Big Data initiatives
2.5XAboveAverage
$$
Sales
Customer
Service
Marketing
44% of total
spending is
for
$10M (38%)
$5M (46%)
Expected
average
return
Source: stats extracted from TCS, “The Emerging Big Returns on Big Data”, 2013

§  Proactive maintenance
§  Capturing engine sensors’
data can help predict part
failures.
§  Result: safer flights, lower
risk of delays due to
malfunctioning parts.
Have a good
sense for it?
The power
of sensors.
§  Real-time route
optimization.
§  More accurate flight
landing time.
§  Real-time fuel
management.

+  Adding extra history.
+  Competition pricing.
+  Live schedule changes.
+  Customer data.
+  Weather data…
The
power of
sensors.
Full-picture
revenue
management.
RM has always
been a Big Data
problem.

§  Normal time to shop, devices, location. What’s your
behavioral fingerprint? Crosschecks with social media
data.
§  Big Data technology also means more muscles to
process more, and faster. Potentially less cart
abandons.
§  The world is adopting full transparency. Not sure
what’s private anymore…
Comprehensive verifications
without killing conversions.

§  Female
§  35 years old
§  Lives in Brooklyn
§  Flies NYC-ORD often
§  Upgrades to first
§  Often flies NYC-LAS on
other airline
§  Follows biker club on
Facebook
§  Watches MMA fights on
YouTube
§  Reports miles jogged
every morning on
Facebook
5 days in Hanoi
including SPA treatment
and gourmet indulgence
Visit the Grand Canyon
Airfare plus 2 nights at
Keep-in-Shape Resort
Imagecourtesyof
Marcus/FreeDigitalPhotos.net

Ancillary sales become more effectives.
Customers can see the value.
§  Major trend is to know your customers personally. Build
more intimate relationships.
§  Demographics are more and more obsolete. It’s all
about habits, preferences. CRM to incorporate
unstructured data, mood, behavior, updated in real-
time.
§  Leverage data to breakdown customers to smaller
groups, eventually to individuals.
§  Adapt marketing tactics on the fly. “Agile” marketing?
§  Target becomes more precise: the right person, mood,
offer, at the right minute, at the right corner.

1.
Establish
governance.
§  Data is everywhere, and
touches every department.
§  Need for a cross-functional
team to set directions and
priorities.
§  Build specific skills to move
forward.
§  Set rules: including,
framework to decide when to
stop. Do NOT become data
addict.

2.
Start with
business
problems to
solve.
§  Don’t get lost into data!
§  Big data gets people to think
backward: “I have this piece
of data, what can I do with
it?”
§  May work when refining what you
have.
§  Design a data hub that helps
resolve key and concrete
business problems.
§  Design the answers. Then look
for solutions.

3.
Don’t become a
data addict.
§  The problem with data is the
more you have data, the more
you want data.
§  Focus on the real problems at
hand.
§  Use your governance team to
set up some rules of when to
stop digging for more data.

4.
Embrace the
cloud.
§  Grid computing and
virtualization are keys to
develop scalable platforms.
§  Copy and migrate data only
when you really need it.
§  Large data sets are already
available in the cloud.

5.
Don’t turn IT
into a reporting
center.
§  Empower your business users
as much as possible.
§  Choose visualization and
analytic tools that are user-
friendly.

Organised in co-operation with
LEAD SPONSOR
Question and Answers
Airline and Travel Payment Summit 2013


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