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irium released its Airline Insights Review 2020. Within it are a multitude of topics including, the struggle to match schedules with travel demand, wide-body aircraft retirement, domestic travel and industry recovery.
However, there is one trend in particular that jumped out – the new way of forecasting demand.
For airlines to find commercial success in the post-COVID world, old techniques must fall by the wayside in favor of democratized data and inter-departmental collaboration.
New Booking Patterns Require New Data
According to Cirium, during Q4, bookings were down 78% compared with the same period in 2019, while the summer period of 2020 saw 40% of bookings being made last minute—as little as one to three days before travel.
As represented above, flight volume in 2020 was just 57.27% of 2019's volume.
Cirium suggests, with historical data becoming increasingly less useful in forecasting demand, airlines need to leverage new indicators such as search and sentiment data, including online searches, price comparison sales data, and social media activity.
According to the aviation and travel data and analytics company, "airlines looked to these indicators previously, but as a secondary source.
Moving forward, these are likely to become primary indicators for predicting demand and developing pricing strategies."
The End of Data Silos
In order for airlines to both inject new data and reprioritize existing data into their commercial processes to make informed timely decisions, data must flow freely throughout the organization by breaking down silos.
Mike Malik, Chief Marketing Officer, Cirium, discussed the need for more data fluency within the aviation industry.
"Data fluency can help save the day. Those airlines that are poised to succeed post-crisis will be those whose data can cross the organization and be used by disparate parts. The winners and losers of this battle are being decided now."
"Our industry is notorious for having legacy data silos. Data silos present challenges in our ability to make good, intelligent decisions. They hamper optimized revenue maximization and cost savings—and there’s no good reason they should exist today," wrote Malik.
"Data fluency can help save the day. Those airlines that are poised to succeed post-crisis will be those whose data can cross the organization and be used by disparate parts. The winners and losers of this battle are being decided now."
Data must not only be shared horizontally from department to department, but also flow vertically from operations teams to managers instead of being locked away by a select few.
This will create the efficiency and agility to make near instant decisions, which will have a tremendous impact on revenue, especially during unprecedented times like we're living in our current demand environment.
