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Data has always played a major role in the airline industry in everything from customer loyalty programs to financial models predicting fuel prices. Today however, airlines almost need to view themselves as data companies first and transportation companies second.

The reason for this is the challenging competitive environment airlines find themselves in. With industry profit margins averaging around 3%, airlines don’t have the luxury of guessing which strategies will improve operating efficiency. And they don’t have time to learn through the process of trial-and-error.

Fortunately, there is an enormous amount of data waiting to be captured and put to use. Customer loyalty programs are no longer the only data source, even for demographic information. Data from customer behavior can be used to make key business decisions via market segmentation and predictive analytics. As a result, airlines need to view big data as a major competitive and strategic asset for their organizations.

Unfortunately, some barriers remain for many airlines hoping to increase their use of data. In some cases, carriers simply lack the IT infrastructure necessary to capture, store, and analyze the vast amounts of data being generated, much of which needs to be processed in real time. In other cases, even airlines that do have an adequate technological infrastructure in place may still lack the business processes necessary to make sure their data is being used properly.

This isn’t just a question of investing in better technology. Airlines may need to reorganize both their operations and their processes in order to make sure data plays a central role, rather than merely being an afterthought. Customer interactions and touch points must be redesigned in order to capture as much information as possible. They must also have the ability to implement changes in real-time based on that data and its analysis.


Personalization & Customer Experience

Today’s consumers have plenty of choices when it comes to air travel and with so many options available, it’s now more important than ever to deliver an outstanding customer experience. But even the meaning of that has changed: it’s not enough to simply implement across-the-board, one-size-fits-all solutions to improve a customer’s experience. The fact is, different travelers have different priorities when it comes to air travel.

Perhaps one of the most obvious ways better data can be a strategic advantage is in personalizing the airline offer. This means more than just collecting information from loyalty programs. Carriers can now create comprehensive profiles on all of their passengers using data from a number of different sources such as attribution and path to purchase, social media, search, mobile and location specific data, and buying patterns.

Big data has the potential to fundamentally change how airlines relate to their customers. Airlines can offer a personalized incentive for every type of customer resulting in more ancillary sales, repeat business and an improved customer experience. Data about airline customers browsing and buying patterns is everywhere. From credit card transactions and online shopping carts, to airline loyalty programs and user-generated ratings/reviews, there is a staggering amount of data that can be used to describe past buying behaviors, predict future ones, and prescribe new ways to influence future purchasing decisions.

The deeper your understanding of customers' buying habits and lifestyle preferences, the more accurate your predictions of future buying behaviors will be – and the more successful you will be at delivering relevant offers, at the right time, that attract rather than alienate customers.

Next Generation Airline Revenue Management

Another way airlines can use data is to get more accurate estimates of capacity needs and pricing. While data has always had a role to play in airlines estimating capacity and driving dynamic pricing, next generation revenue management platforms allow carriers to analyze more historical data more frequently, and even in real time. The result is optimized pricing and capacity planning, expanding operating margins and improving profitability.

Revenue Management Systems, A Mercator Company, is pioneering the use of non-traditional data sources to help airline revenue management analysts manage their flights. We use many types of data to provide airlines with the most comprehensive picture during their decision making process. PNR, O&D crossing traffic, OAG, ATPCO, T-100, DB1B, Twitter, tour operator (B2B) sales, ancillary revenues, and weather reports are some of the other data sources currently found in airRM.

Interested in learning more about Mercator’s airline IT solutions?

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