Airline Load Management by Search Results
From Vegas, Baby.
Scandinavian Airlines presents a case study today on how they are using Organic search results captured through the web site to forecast load management issues on the airline and help optimize the revenue management system.
They track run rates on destination-oriented search phrases and noticed a correlation between spikes in destination search and sold out planes to those destinations a couple of weeks later. Just to be clear, we’re not talking about on-site search or booking-engine data here but Organic search phrases coming in from search-driven visits.
Of course, the web folks going in to pitch this idea of actually scheduling planes based on search results faced an uphill battle, just like the folks at Ford did with their production tweak suggestions based on visits to the web site car configurator.
But at some point, the repeated correlation over time (and pain of money left on the table) could not be denied and now destination search volumes are used as an input for the revenue manangement system to improve yield.
Kudos to Massimo Pascotto and team an Scandinavian Airlines for hanging in there, forcing the issue, and winning the metrics battle with the revenue management folks!
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January 24th, 2008 at 1:45 am
[...] Accurately estimating demand at a granular level is critical for operations management in the travel industry. Traditional estimation models have used historical data to predict the demand. Recently, some companies have started experimenting with a novel source of data to augment the traditional models – the search data from their own websites. Scandinavian Airlines has been a pioneer in this space. It is using the volume of search activity on its website for flights on a particular day to estimate demand for the specific routes and flights. They use this information to guide their operational decisions e.g. which type of aircraft to schedule for the flight segment. As expected, there was a lot of resistance within the company to make decisions based on these numbers but the web analytics team collaboratively worked with the constituents to gain confidence of the operations team and bring about the change Online is already a significant channel in the travel industry. Web analytics tool vendors like Web Trends and Omniture have made significant inroads and power most of the major travel websites. This means that there is a lot of data readily available for analysis. Travel companies should follow Scandinavian Airline’s lead and start exploring this data to make better operational and marketing decisions. [...]