Data mining and its impact on the airline industry

In today’s technology filled world, marketing a company’s product or brand requires a vastly different approach than it used to. Consumers themselves have changed drastically and often do not fit in a certain persona or target group anymore. (Peelen, 2013) consumers themselves are becoming product experts and make their purchase decisions based on their own research and knowledge obtained through the internet via reviews and forums. Moreover, when dealing with a company, the customer of today wants to be approached in a personal manner and expect the company to know what they want. (Peelen, 2013)

To get insights into the personal wants and needs of a company’s customers, customer data needs to be obtained, managed and analyzed. (Peelen, 2013) Using, or rather, ‘mining’ these big data is crucial for companies to remain competitive in this digital age. (Direction, 2012) Data mining itself is the process of going through (organizational) databases, managing the data and trying to find patterns and connections within groups of data. (Chaffey, 2009)

A significant problem for organizations concerning big data is that it’s, much as the term suggests, a lot of data and also a lot of work to mine it all. As there are many different options to gather data and store it in different places it can be an overwhelming task for companies to effectively manage and use big data. (Direction, 2012) Many organizations also struggle as to what they should be looking for in a database. However, despite the problems around handling big data, an increasing amount of managers are starting to become aware of the benefits of being able to handle the data and are willing to invest in better ways to monitor and manage data as well as hiring new expert staff members. (Direction, 2012)

So what does data mining mean to the airline industry?

Ishikawa (2015) writes that 8.6 million passengers worldwide travel every day in close to 100.000 airplanes. Moreover, a lot of these passengers travel on a regular basis and thus can provide companies within the airline industry with a substantial amount of data. Ishikawa (2015) also explains that these data can be used to verify what attracts customers on an individual level and data can also be used to review the ‘costs of airplane upkeep, equipment and staff’, which can be of help with budgeting. It can be difficult however to select data that can be of use, although many airline companies are already ‘utilize up-to-date data mining strategies’, Ishikawa (2015) says.

Customer service can also greatly benefit from data mining, as the more a company knows about their individual customers, the better they can accommodate them. The customer experience can be positively influenced greatly when data is used effectively. Southwest Airlines has seen positive impacts after they switched to using personal data instead of anonymous customer data to market their products. They are also using personal data to strengthen the evolving relationships between them and their customers. (Ishikawa, 2015)

Lastly, Ishikawa (2015) argues that the key to an airline’s big data is how they store it. As a substantial amount of new data is added to the data pile so to speak, a cloud-based software program could provide a solution to storing the data. By having all the data in a single place and having it available on a ‘cloud’ so that it’s accessible from anywhere, allows for more effective data exchanges between parties involved with flying. Air controllers for example can use data from the cloud to write a more efficient travel route, based on earlier flights.

Author: Yannick Jongejan


 

Chaffey, D. (2009). E-Business and E-Commerce Management (4th ed.). Harlow, England: Pearson Education.

Direction, S. (2012) Big data needn’t be a big headache: How to tackle mind‐blowing amounts of information. Strategic Direction28(8).

Ishikawa, M. (2015, July 16). Data mining’s impact on the airline industry [Blog post]. Retrieved from http://www.avianaglobal.com/blog/data-minings-impact-on-the-airline-industry/

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (Second ed.). Harlow: Pearson Education Limited.

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