The Flying Data

Three weeks ago I started writing the IT agenda for Aviation Festival Asia 2016. The most immediate topic popped up in my mind was Big Data: how the airlines were coping with it and how the technologies could help to solve the problems. A quick Google search showed a tremendous amount of information on the latter, but pathetically little on the former.

So I decided to call out for help from the industry.

Since I got the precious chance to talk with IT leaders from ANA, flydubai, Gulf Air, Jetstar, Regional Express REX, Royal Brunei Airlines, and Los Angeles World Airports; I thought it’d be great to share with you what I’ve learned. For those who aren’t knowledgeable in IT, I hope this post would inspire you to find out more on this area. For the IT experts, I hope you could share your views.

1. We need a data warehouse, not a warehouse of data.

Airlines care about two types of data: data about the passengers and data about operations, and both remain in silos.

The challenge of structuring the passenger data comes from the nature of the industry itself. Everyday airlines gather a googol data points from millions of passengers traveling from everywhere, millions making bookings, and more potential travelers scouring travel sites and airline sites for the best deals. This wealth of data has the potential to revolutionise the passenger experience; however freeing that revenue is still a big concept that many airlines have trouble figuring out where to start.

Airlines’ data of daily operations are disconnected: the reservation systems, the email systems, the finance systems, the engineering systems, and the list goes on. They operate on different softwares and have different methods of gathering and storing data. It’s a pressing need for airlines to build only one version of data that is accessible by all departments and used as actively as possible.

2. Airlines want to bypass GDS to actively access and control the passenger information.

By outsourcing to Global Distribution System (GDS) companies, airlines are constrained with the ability to access passenger data and take control over how it is formatted.

GDSs have their own standards that airlines have to comply with. The data is not always 24/7 available and presented in the format the airlines want. Also, it’s getting more and more difficult to have the data back from GDSs because sometimes GDSs charge airlines if they want to extract certain data of their own passengers.

We have seen Lufthansa introducing Distribution Cost Charge (DCC) as a step forward to bypass GDSs. The industry is keeping an eye on it. If it’s successful, other airlines will quickly follow.

3. Gathering the data is important. But it means nothing if we don’t know how to analyse and put it into use.

Airlines recognise at the executive level that Big Data can improve passenger experience through personalised products and services.

However, it’s the gold that needs a bit of alchemy to mine.

Though airlines have the tools, they are still experimenting how to analyse and put Big Data into use. For those who aren't expert in IT, this might be difficult to comprehend. So think of it this way. If you’ve ever done statistics in school, mining Big Data is like how you analyse the data using SPSS. You have the data and the tool, the key is to apply the right variables, coefficients and algorithms to understand the passenger purchasing path.

Moving forward, the industry will reach the state of data automation where the data can be automatically stored, analysed and made sense itself. Yet for now, there’s still a lot of human adjustments and experiments in data analytics, and we haven’t seen any airlines successful in analysing the data and applying it to solve real-life challenges.

4. Cloud is a trend, but airlines have to think twice before jumping on the bandwagon.

Everybody’s jumping on the bandwagon when there’s a new trends. Yet when we talk about the cloud, very few of us ask ourselves if we really know what the cloud is, what are the exact pros and cons of it? Is cloud a good idea?

If you are a new airline and haven’t invested a lot in in-house data centre, then cloud computing might be more valuable. But if you’re an older one with existing data centre, it’s difficult. Cloud computing might not be as simple as putting your data onto a third-party server. Airline IT leaders have to consider the following key factors before moving their IT infrastructure to the cloud.

• Security: Which one is safer, in-house IT or the cloud? How to cope with cyber security? When I operate on the cloud, what would I do if the Internet connection is down? 
• Accessibility: Am I able to access to the data 24/7? Can I extract the data in a timely manner?
• Criticality: Which data am I willing to put onto to the cloud - considering all its risks?
• Cost efficiency: Is cloud cheaper and more reliable than in-house IT?

5. Moving forwards: Do you have a real-life example?

A majority of the IT leaders I spoke with said that they haven’t seen anyone in the industry successfully deploying Big Data and cloud. So if you happen to know any airlines or airports who have taken a major step to solve any of the following data challenges, please share. We’re in search of real-life examples.

• How to build an enterprise-logical data model -- where it’s a data warehouse, not a warehouse of data?
• How to apply data analytics to solve operational challenges and offer personalised products and services?
• If you are ready to move to the cloud, how do you do that?

Check out other LinkedIn posts on airlines by Phu Nguyen: 

• Airline Leaders On Keeping Up With Millennials
• Leadership Insights for Budget Airlines' Growth in Asia
• "Sorry, I'm Also A Victim"
• How's Your Flight

About: Phu Nguyen is the conference manager of the Aviation Festival Asia series. She creates content and connects leaders from full-service airlines, low-cost carriers and airports across APAC and beyond.