How data and analytics can enable airlines to navigate towards more streamlined operations
Achieving excellence has always been at the core of airlines’ operations. But with the freefall of the aviation industry caused by the global pandemic, airlines have needed to take a fresh approach to not only managing, but also enhancing, operational excellence.
Although new technology has offered ways of addressing this challenge, airlines have realised that, when it comes to achieving operational excellence, it’s not just about adopting new technology applications—it’s about managing data.
Becoming more data centric
On the flightpath towards operational excellence, many airlines have suffered from a somewhat limited view of the future, which has triggered the need for them to become more data-centric. That has involved moving away from the data silos of different operations and departments towards an integrated, data-driven, and more agile environment.
The focus has been to leverage the wealth of data from all sources in an integrated way to not only digitalise the way airlines manage operations, but also establish a culture for data-driven decision making at all levels. This includes when and where to invest, how to increase efficiencies and reduce costs, and how to deal with irregular operations, crew management, and other operational issues.
With a more data-centric view of the world, large amounts of data can be transferred in a multitude of forms across the entire aviation ecosystem, with airlines able to unlock relevant insights from various sources and create real business value.
In a Lufthansa Consulting survey on operational excellence, airlines confirmed their long-term pain points related to data, processes, and human factors. Even when assessing pre-pandemic operational performance, only one in 10 airlines were absolutely satisfied with their own operational performance, while one-third were not satisfied. Interestingly, this roughly equals the number of airlines who said they did not have any operations improvement program in place at all.
The survey further revealed that there are still too many airlines who see operations as a silo and that improvement programs rarely include customer-related departments (although many claim that customer satisfaction is one of their top targets).
Therefore, it’s important that airlines ensure a collaborative mindset across the whole ecosystem, and a real commitment to execute from both internal and external stakeholders, involving different departments and organisations with varying ambitions and perspectives, all working towards the same goal.
Marketing vs. operational excellence
One of the key questions airlines have to answer is: “is it possible to become an innovator in marketing while achieving operational excellence”? The answer is a qualified “yes”—with the availability of increasing breadth and depth of data and analytics, an airline can plan strategically and simultaneously in what appears, on the face of it, to be two opposing forces.
In fact, internal data platforms can be created to break down internal silo systems, enabling marketing and operations to integrate in order to focus on customer and employee experiences and their expectations. That’s the value of an integrated data approach.
Moreover, internal data platforms enable management to move away from a fixation on conventional streams of ancillary revenue and focus beyond the core products to where there are arguably much higher value opportunities for new streams of ancillary revenue.
Fundamentally, it’s about bridging the airline’s operational and commercial needs with customer insights and research to the benefit of the entire organization. It also means developing data-driven pricing strategies and customer marketing programs that boost sales and revenue, increase customer loyalty, and drive profit opportunities.
“We’re in this together”
As travel recovery continues, and passenger confidence increases, one of the ways travelers think airlines can better support their end-to-end experience is by improved personalisation to tailor flight bookings, ancillary offers and the overall travel experience to their needs.
Therefore, from an operational perspective, airlines need to leverage real-time data, analyse new data trends and react quickly to fluctuating market conditions with fast, smart decision making. This can lead to the “holy grail” of higher converting customer-centric pricing and services, ultimately capturing more customers and opportunities in real-time across the revenue cycle.
Fundamentally, this needs to be underpinned by an integrated data strategy that has one clear objective—creating a “single version of truth”, a single database infrastructure available across the entire operation that breeds trust, enables common goals to be met, and allows the sharing of best practice.
In other words, it’s about creating a mindset of “we’re in this together”.
In it for the long haul
The challenge of achieving operational excellence really comes down to execution and management of assets and infrastructure, as well as real time synchronisation, with an organisation-wide perspective to achieve better outcomes.
Operational excellence is long haul. It takes time. But the benefits of investing in data and data analytics will ensure that airlines stay on the right course when experiencing increasingly turbulent times.
At the forthcoming Future Travel Experience Ancillary Conference, Teradata – along with airlines, airport operators and industry leaders – will discuss and share future plans and visions around operational excellence.