Roland Schütz, Lufthansa

Roland Schütz, Lufthansa

Big Data @ Airlines

The economic pressure to exploit big data

Roland Schütz, Chief Information Officer at Europe’s largest airline, Lufthansa, says the German airline company is ‘fuelled by big data’. “We’re connecting people on a global scale and there’s a growth in human and digital data carried around,” says Schütz, adding Lufthansa uses other forms of big data, such as mechanical data, to link to other sources. The company has an unparalleled source of data that hasn’t yet been exploited, and there is economic pressure to do so.

Schütz said the global megatrends affect the aviation sector. The shift of economic power to Asia, new consumers, new mobility patterns and global demographic trends are all factors in the transformation of the market for air travel. “It’s no longer enough to bring your passenger to their destination alive,” he said. Safety is now not enough to win passengers because most airlines, even in developing countries, are safe. Instead, it’s about investments in greener fuel and other improvements. The biggest IT spending in aviation will be on customer service and personalisation, he predicted. Challenges facing the transportation industry include economic instability and uncertainty, increased fuel costs, and the difficulty gaining real-time supply chain visibility. Airlines will probably suffer more loss than profit in the long run, even though there are more passengers, he added.

The process of collecting data starts with booking flights; customers have to provide their name and date of birth. Data can also be collected during mission-critical business processes which rely on IT, such as checking in and luggage handling. “We only use data of passengers that provide it voluntarily. Privacy is big in Germany,” said Schütz, adding that Lufthansa uses data for personalised experiences, to offer products and services. “When we remember their occupation and food preference and mention it again, we show our interest and that we care. Airtime gets a new meaning.”

Convenient and complete – the customer experience of big data

Schütz said people have easy access to information. “There are more smartphones than toothbrushes in the world,” he said. Google influences passengers’ choice of airlines for example, and passengers can be differentiated by destination, ticket price or quality of service. The value chain is also about services such as hotels and airport services. “Airline websites look like online travel agencies. It’s convenient and complete. That’s how it will get the customer’s attention in the future.”

The CIO explained that companies need to look at the architecture of big data: “Big data projects often start with data consolidation and data streaming.” Lufthansa has more than 80 sources of data and more than six customer databases. “It’s a heavy investment in the hardware,” said Schütz. “It’s not rocket science, but today’s technology is about memory, because memory has become cheap.”

Airlines use big data to learn about historical patterns and use real-time information to predict departure delays, optimise fuel consumption, protect the environment, maximise aircraft usage and shorten flight times. “We can collect and evaluate aircrafts’ technical status information,” said Schütz. “With predictive and preventive aircraft maintenance, you can prevent downtime and have fewer unplanned delays.” He said that if social media had been evaluated immediately after the Los Angeles International Airport (LAX) shooting in November 2013, appropriate ‘irregular handling’ could have started earlier and mitigated the impact on business. LAX is the second busiest airport in the USA and as it was, 118 flights were cancelled and many more re-routed.

“It’s truly economic pressure that drives us to use measures like this,” said Schütz. “We want to keep the consumer happy and optimise our full potential.”

Big Data @ Airlines
Big Data @ Airlines RSM Leadership Summit 2014: Roland Schütz, Lufthansa
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