Airlines are getting better at data analysis. So now they face a fresh challenge of having to leverage that data by making their real-world operations correspondingly more responsive.
Lufthansa Group says it has become adept at collecting data about its business. But the German flagship carrier acknowledges that it still faces a challenge to take control of all the information and apply it to solving specific challenges.
Compared to its peers, Lufthansa is a pioneer of digital innovation in airlines. But even pioneers are hampered by the disconnect between digital experience and the physical and pragmatic realities of real-world operations. Optimizing boarding, doing preventive maintenance, enhancing yield management, rationalizing mileage programs, and improving gate allocation are just a few of the tasks airlines face — all of which require different analytical views of the same data.
On Tuesday, there was a fine example of this digital dilemma cited by Christian Langer, Lufthansa Group’s chief digital officer, while he was on-stage at Skift Global Forum in New York City in a chat with Skift aviation business editor Brian Sumers.
Langer said he had once asked his teams that, if his staff found out from a sweep of passenger data that a particular flight between Frankfurt and Johannesburg was going to have 50 Chinese nationals on it, how long would it take for the operations side of the business to put five Mandarin-speaking flight crewmembers on that flight.
“The answer was something like five months,” Langer said. “So it’s worthless for us to improve our predictive power if we’re not able to use it… [We ask ourselves:] How can we get the physical reaction time down to the time we’re able to predict something?”
Airlines like Lufthansa are rapidly improving in their ability to analyze data. The rise of machine learning will speed up that curve, Langer said.
“Artificial intelligence and all of that other stuff will become a commonality before pilots are fully replaced [by autopilot],” Langer said.
Langer’s boss, CEO Carsten Spohr, has said his worst fear is that Google will control the travel experience, with companies like Lufthansa Group becoming commoditized transportation providers. When it comes to addressing the ownership of the customer relationship, Sphor has a strategy that’s a work in progress.
Yet, from Langer’s perspective as a digital officer, he believes that technology can help Lufthansa and other airlines optimize their use of information on their most loyal customers — something no gatekeeper (such as major online marketplaces) can compete with.
For consumers, the most urgent matter is improving their experience from gate to gate. Langer agreed that the boarding pass as we know it is broken. He joked that the solution is for people to fly business class instead of coach.
More seriously, he said Lufthansa has been experimenting with streamlined processes for boarding.
But he hinted that there is a lot of complexity in the system that is not entirely in its own control, such as local regulation and having to cooperate with airports. In other words, practical and commercial can cause challenges that cause gaps in data collection and analysis. Yet these can be surmounted with creativity, he said.
When it comes to the pace of change and the challenges he noted, Langer was optimistic overall.
“My vision of the future is that identity, loyalty, and payment will be one,” Langer said. He also referenced the REM lyric “It’s the end of the world as we know it and I feel fine.”
Related: We’re excited to announce that you can live stream select sessions from Skift Global Forum on the Yahoo Finance homepage, this Tuesday and Wednesday, September 26 and 27. This includes our session with Expedia’s new CEO Mark Okerstrom and the CEOs of TripAdvisor, Delta, and Marriott.
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Photo credit: Christian Langer (left), Lufthansa Group's chief digital officer, speaks to Skift aviation editor Brian Sumers about the challenges of effectively using all that passenger data the airline collects. The conversation took place September 26, 2017 at Skift Global Forum in New York City. Skift