Big Data takes Flight with Delta

Group 28 Proposal

Setor Ahiable

Zihan Qi

 

Big Data takes flight with Delta Airlines

 

WHO ARE THEY?

Delta airlines are a major American airline headquartered in Atlanta, Georgia in the United States. Delta started as an aerial crop dusting operation in 1924 but has now grown into one of the world’s largest airlines transporting about 160 million passengers yearly.

Delta has ten domestic hubs and three international hubs including Amsterdam Schiphol Airport and the Charles de Gaulle Airport in Paris. (Delta, 2016)

 

MOTIVATION/BACKGROUND OF BIG DATA FOR DELTA

The airline industry is today very interested in Big Data but how exactly does Big Data help a company like Delta make money? Or how exactly does Big Data help Delta airlines in anyway at all?

Big Data, as understood and accepted by most today, is high-volume, high-velocity and high-variety information assets which can create substantial economic value and help with operations, decision-making, risk management and customer service. IBM believe big data is essential for evolution of data and information management.

Data analytics has been used efficiently to increase sales in the retail industry examples are companies such as Amazon and eBay. Therefore how can an airline emulate the successes of these online e-commerce retail companies’ use of big data. They can do this by:

  1. Greater Value Creation for customers
  2. Increased Personalization

 

Increasing value for customers to use their services and increasing personalization is obviously going to increase demand for the airline and therefore generate more revenue.

(Abhishek Singh, 2013)

 

OPPORTUNITIES AND THREATS FROM BIG DATA

Delta has been able to use big data to provide the following opportunities:

 

  1. Create value propositions based on increasingly real-time information about customer preferences and needs and using that information for targeted services.
  2. Delta has invested over $100 million in airport baggage systems to track and improve its baggage handling. With more advanced tools for baggage data collection and analysis, Delta’s operations teams at airports and headquarters have been able to better identify key causes and trends in mishandled bags and implement effective solutions.By integrating real-time flight data into its baggage systems, Delta now automatically alerts baggage handlers when connecting bags need to be transferred directly to another plane instead of sent through the airport’s luggage sorting system.
  3. Delta has made use of more advanced data in its efforts to better engage customers and generate loyalty. The airline combines customer data from flight purchases, routes flown, and credit card spending to piece together customers’ demographic profile, travel habits, spending ability, and even what company they work for. The company uses that data to carefully tailor promotions and target customers with whom the airline senses there is more opportunity. If you have recently joined a travel-heavy professional services firm

 

However some threats from using big data exist. These are:

  1. Customers may feel their privacy is being invaded on a bit too much and may decide to use another airline

(Sean L. 2013)

 

TIMELINE AND WORK DISTRIBUTION

 

TASK DATE
Submit Proposal 13th October 2016
Prepare Case Study blog entry 4th November –  27th November 2016
Submit Case Study blog entry 28th November 2016
Prepare and Present Case Study December 2016

 

BIBLIOGRAPHY

Abhishek Singh. (2013)Big Data – how airlines should use it more effectively to boost ancillary revenue – Tnooz. (2013). Tnooz. Retrieved 13 October 2016, from https://www.tnooz.com/article/big-data-how-airlines-should-use-it-more-effectively-to-boost-ancillary-revenue/

 

Delta (2016). Retrieved 13 October 2016, from http://www.delta.com/content/www/en_US/about-delta.html

 

Sean L. (2015) Big Data Takes Flight at Delta Air Lines – Digital Innovation and Transformation. (2015). Digit.hbs.org. Retrieved 13 October 2016, from https://digit.hbs.org/submission/big-data-takes-flight-at-delta-air-lines/

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3 thoughts on “Big Data takes Flight with Delta

  1. Despite the multiple benefits that the use of Big Data is providing to the airline industry, there is one threat that might be interesting to look at, also along the lines of customer privacy.

    It is very often the case that airline companies hike up the prices of the flights, depending on the specific customer that is carrying out the search. Given that they have the ability of collecting data on flight frequency, recent flight destinations and purchase of additional services, they are able to construct a relative measure of their customers’ purchasing power.

    Therefore, customers that notice such patterns, are increasingly wary of providing their personal information, and often avoid creating an account or logging in to it when searching for potential flights. Often, they even choose to make their purchases using softwares that make their browsing private.

    This awareness of the risks of sharing private data, will have negative consequences for companies like Delta, which are slowly becoming more dependent on the collection and use of consumers’ data. How could Delta approach this threat?

    Like

    1. Really good point Juliana! This technique is currently being used by many other types of companies, especially retailers, but there’s one way to avoid this which is pretty straightforward- one can just delete one’s browser cookies or search from a different account when actually buying the product. I do however agree that when searching will be more linked to the account you’re searching from (e.g. Google Chrome account) and not the locally saved cookies it’ll be harder to avoid.
      Having said this, this isn’t the only way in which customers pay more for expressing preference for a product (The Undercover Economist is a really good book, and its first 2 chapters explain the principle).

      Like

  2. Delta Airlines, as one of the biggest American commercial airlines, is a good choice for your topic. In our contemporary world of globalisation the aviation industry will continuously expand as an increasing amount of people can afford to use flying as a means of transportation. For airlines this means that Big Data presents an important opportunity to improve their product for a growing customer base and market.

    You highlight the opportunities for value creation very well in your draft. One more point that could be included is the implications of Big Data for Flight security, although this would go further than just focusing on Delta Airlines. So this may be something to consider if you have the time to include it.

    One thing that you could do is to expand on your threat section a little more. Is privacy the only threat that arises from Big Data? What about information security and insufficient return on investment?

    Like

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