Sabre Airline Solutions has released a new whitepaper highlighting the business challenges faced by airlines in the area of customer data, retailing, and personalization. Brand differentiation and personalized sales and service are becoming increasingly strategic areas for leading airlines due to their market share and profit potential. In the whitepaper, Sabre discusses the unique complexities in the industry, analyzes new findings about revenue potential, and discusses ideal solutions for these problems in the market place.

In the world of data, airlines face a few challenges that other industries aren’t subjected to. One of the primary difficulties is that airline customer data has been growing since about the mid-century. First with analog, then with digital technology, the industry had to create systems and processes to serve their customers long before e-retailers were even doing business. As such, legacy systems like ticketing, coupon records and check-in message processing were used as the technology foundations, and they were built on top of as time progressed.

Not only was time not on the industry’s side, but operating a low-margin business is occasionally prohibitive to technology investment and innovation. Luckily, airline data processing made a significant leap forward in the 1960s and 1970s. IBM’s Airline Control Program (ACP) operating system, developed in 1965, was technologically ahead of its time with its velocity and volume capabilities. ACP was improved upon in 1979 with a data processing technology called Transaction Processing Facility (TPF). TPF is still a minor component in some airline operating systems even today. As customer data matures and evolves, however, new data processing technologies will be required for real-time personalization.

Unifying customer data is the key to customer understanding, engagement and loyalty. It is truly the next frontier for differentiation, due in part to industry dynamics that have occurred over recent history.

“The challenge is making the data come alive so we get a better picture of the individual customer,” said Jeff Foland, executive vice president of marketing, technology and strategy for United Airlines.

Airline executives learned long ago that their customers were very price sensitive, and they chose to focus heavily on cost reduction, efficiency and minimalism. As such, technology infrastructure investment and data technology modernization activities were slowed. The customer data across the enterprise, therefore, developed at different paces and operated on technology with varying levels of sophistication. The siloed functional nature of airlines and their respective technology tools also adds a natural layer of complexity to the aggregation, de-duplication and normalization of customer data between systems.

Data storage and processing technology has been a consistent hindrance for airlines looking to integrate their customer data across their internal system silos. The industry is awash in valuable data, but airlines have struggled with the business justification, and finding the skill sets necessary to execute a complex data strategy development and execution project.

“Airlines have always been very good at collecting data, but they haven’t always been good at using it,” said Scott Wilson, vice president of ecommerce and merchandising for United Airlines. “Now that the costs of storing and processing data have dropped — even as airlines collect more and more of it — it’s becoming easier for a company to act on it.”

To read the rest of the story, download the full whitepaper!