Asking Questions

Fragmentation impairs our ability to leverage the information resources we have, because we can t use the data. Consolidation enables us to ask not only I don t know questions but also the even more important what if questions that can drive new initiatives. When we can ask questions of our information, we gain new insight into our business. When we stop making assumptions and start making decisions based on facts, we can leverage our knowledge to capitalize on opportunities.

Continental Airlines

Continental Airlines never assumes anything. In 1999 all aircraft in the United States were required to comply with a new set of higher noise restriction standards at takeoff and landing. Every airline, except Continental, hush-kitted their airplane engines. Continental got rid of all its non-compliant airplanes (Stage 2 airplanes) and replaced them with new airplanes (Stage 3 airplanes). Why? Because CEO, Gordon Bethune asked the right question.

At what price, he wanted to know, did it make more financial sense to replace a plane than to put on a hush-kit? Drilling down into the facts and data, Continental was able to determine that the benefit of standardizing its diverse airplane fleet would be cheaper than retrofitting its existing planes. On the cost side were the new airplanes. But on the return side were: savings from not investing in the patch-together solution of a hush-kit (estimated at $1.25 million per engine, it was not an insignificant cost); higher fuel efficiency; cheaper maintenance; and because of the new fleet consistency there were the additional, measurable benefits of interchangeable spare parts and crew flexibility to work any flight.

Having access to the wealth of information needed to answer Bethune s question enabled Continental to comply with federal regulation, while saving money and improving its fleet.

 

When other airlines were taking the view that they had no choice but to hush-kit their planes, Bethune s one astute question proved that assumption wrong. Bethune s philosophy, and the philosophy by which Continental is guided, is to investigate the information closely before making a decision. Ask questions and keep asking questions until the right path is clear.

Of course, Continental is not the only airline asking lots of questions now. British Airways adheres to the principle that managing its data sensibly will enable it to make better decisions.

British Airways

In theory the airline industry should be simple. As Paul Coby, British Airways CIO says, It s all about moving people from A to B. In practice, of course, there is much more to it than that. Decisions regarding price, frequency, demand, staffing and other resources must be made based on the information available. The more available the information, the better the decisions will be. British Airways realized that the key to making this a reality was to have all the data about its operations and customers in one place.

It is important that key business areas within the airline have access to information to make effective decisions. For example, the operations area may require information to such questions as what are the volumes , prices and yields on each route? Where will flight frequency increase or decrease? Crew availability? Marketing can ask about the customer experience. How was the travel and booking experience? How was flying with the airline? How frequently do the customers travel?

With all this information in one authoritative source, British Airways is enabled to ask questions about future demand and detect subtler shifts in the market. As its use of information becomes more intelligent , the better the airline can operate in today s challenging market.