AI is influencing the future of work in the airline industry

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Airlines seeking total revenue optimization need smart solutions. While artificial intelligence and deep learning algorithms promise better forecasting capabilities, those systems can only truly shine when combined with the flexibility and human touch of a data analyst.


Commercial airlines and other travel and transportation leaders face significant challenges managing pricing, demand, and logistics in today’s volatile environment. This summer’s travel disruptions have exposed the potential for intermittent setbacks in post-pandemic operations to have drastic effects on customer satisfaction and revenue opportunities.

With travelers’ patience wearing thin, airlines need to beef up their people, processes and technologies. By embedding artificial intelligence (AI) solutions into their organization’s processes, airlines can leverage their data, analyst and revenue management opportunities to take advantage of new business fundamentals in this changing environment.

“Artificial intelligence is not a replacement for the job of the airline data analyst,” said Alex Mans, founder and CEO of FLYR Labs, a technology company driving business optimization for airlines. “But it is changing its role and hopefully unlocking its potential to generate revenue and improve operational efficiency.”

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Airline data can be difficult to analyze, but artificial intelligence makes it easier. It’s impossible for humans to manually process all the information airlines collect from digital sources, but deep learning neural networks can provide effective forecasts that give analysts the confidence to make better decisions.

“Historically, the main type of forecasting has been linear regression-based models, in which analysts look at highly concentrated year-over-year patterns,” Mans said. “The problem is that there simply isn’t enough data on any flight at any given time to generate accurate forecasts in a volatile environment. Legacy systems are really bad at determining whether reserving a seat on a given flight has a significant impact on the bottom line.”

To power deep learning algorithms, airlines feed neural networks with vast amounts of historical data, such as bookings, searches, events, promotions, and competitive pricing, resulting in forecasts that keep analysts better informed about revenue and load factor performance in the future.

“They can compare how actual performance is developing against forecast data as the departure date gets closer,” Mans said. “The real value comes when, with a platform like ours, analysts come to trust the forecast and can start using it to inform strategic decisions instead of seeing it as imprecise guidance.”

Unleash the full potential of analysts

According to Mans, artificial intelligence should be viewed as an airline data analyst’s intelligent companion: it does not replace the analyst’s job, but rather enhances the analyst’s ability to make coordinated operational decisions in areas where automation alone is insufficient.

“In the past, analysts didn’t have accurate forecasts, so most of their decisions were based on instinct,” Mans said. “On top of that, they haven’t had good user interfaces to consume that data. We generate much better forecasts, enable smarter workflows, and provide a dedicated user interface where analysts can easily access and filter data and then use the resulting insights. With better load and revenue forecasting at any level of granularity across the network, they can do amazing things.”

For example, if an analyst sees a group of flights in the coming months with a forecast load factor of 99%, they can alert their colleagues in charge of scheduling and suggest adding capacity. In most airlines, where organizational functions are often siled, this type of cross-functional collaboration between business teams is not common.

“All it takes to start breaking down those silos is for other teams to have access to the same information that the revenue management team has access to,” Mans said. “At the end of the day, different departments are trying to achieve the same results: maximize revenue and contain costs.”

In addition to being the gatekeeper of that information, the role of the analyst will evolve to support a variety of critical functions across the organization.

“For one thing, they can look around corners that the data itself can’t see,” Mans said. “The analyst may know that a time change is coming, but unless that information is transmitted to our system, we have no knowledge. Artificial intelligence does not know everything. Another thing to keep in mind is that optimizing for maximum revenue is not always the goal. An airline entering a new market may want to follow a non-optimal revenue strategy focused on market control or market share, so the analyst is needed to adjust that strategy. Or consider promotions: Every airline runs tons of promotions throughout the year, whether tied to their credit card program, certain destinations, or other variables that require the analyst to actively work with our platform and their marketing team to achieve best results”.

Harnessing the fundamentals of new business

For airlines to weather the storm of unprecedented industry disruptions today, dynamic pricing powered by deep learning algorithms is essential. FLYR was created to provide a single platform that helps airlines manage data, break down data silos with consistently accurate forecasts that can be accessed by anyone in the organization, and achieve total revenue management across all of their products.

“Our job is to help airlines effectively price everything they want to sell, including add-ons like seat selection, extra baggage, priority boarding and other upsells,” Mans said. “FLYR’s operating system provides a vertically integrated SaaS platform for data management, forecasting, pricing, automation, business intelligence and reporting, including scenario simulation and evaluation, while removing constraints within e-commerce and compliance thanks to acquisitions like Newshore, so airlines can get things done faster and more efficiently. That is what we are building as a company, and that is the future of work within this industry.”

Join us on October 19 at 11:00am ET for a webinar with FLYR Founder and CEO Alex Mans, “How Artificial Intelligence is Reshaping the Business of Travel.” sign up today

To learn more about how FLYR is helping airlines achieve total revenue optimization, check out their latest white paper with IATA.

This content was created in collaboration by FLYR and Skift’s branded content studio, SkiftX.

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