Continental Airlines: Flying High with Its Data Warehouse
The airline industry is a competitive market in which some airlines are profitable while others are not. During the late 1990s, most airlines were lucrative because fuel costs were relatively low and travel was at an all time high amongst flyers. Recently, the airline industry has taken a severe hit due to the increased rate of oil, the 9/11 attacks, and anti-traffic control system to name a few. However, Continental Airlines remains one of the largest airlines in the United States holding its rank in fourth place amongst other airline companies.
Initially, Continental Airlines was not highly regarded because of its information technology (IT) and organizational culture. Unlike other airline companies, Continental Airlines has taken extreme measures by adopting new strategies to overhaul its IT department altogether. The information systems Continental had in place was old and outdated because it did not provide information of its most valuable customers. The Transaction Processing Facility (TPF) was the old IBM mainframe system Continental’s IT team had during the late 1990s. The system was not designed for customer service.
In order for Continental to accomplish its goals, the IT team realized the need to replace its old mainframe. The IT team determined it needed to integrate into one system by consolidating the airline’s disparate customer management relationship (CRM) systems. As a result, Continental joined forces with Teradata to build an enterprise data warehouse comprised of 25 enterprise systems. The warehouses consist of “schedules, reservations, customer profiles and demographics, airline maintenance records and schedules, employee and crew payroll, and customer care” (Rainer & Turban, 2008, p.132).
Additionally, executives of Continental Airlines were able to develop the Customer Value Metric (CVM), which enables them to determine how much money customers spend with its airlines and the costs of flying the customer as well. The data warehouse is a repository of historical data that assist with business operations to include “data mining, decision support, and querying applications” (Rainer & Turban, 2008, p. 117). Many components make up the data warehouse such as business dimensions in which data is organized by customers, vendors, product, price level, and region.
The data in various databases are encoded differently and kept historically for many years. Once data enters the warehouse it is not updated. Databases use online transaction processing (OLTP), in which business transactions are processed online as they occur. Typically, data warehouses are designed to support decision makers by using online analytical processing (OLAP) for the analysis of mass data by end users. Data is stored in a multidimensional structure as well. All data in the data warehouse comes from Continental Airlines operational databases which can be relational databases as well.
These components enable users access to corporate data for analyzing. Special software such as extract, transform, and load (ETL) are used to process data to later store in a data warehouse. However, only a summary of data is transferred to the warehouse. This data is organized in a form that is easy for end users when accessing. The reason why Continental Airlines remains successful is due to their strategies for improving and enhancing quality customer service with many functions implemented by their IT team.
Continental Airlines main focus is increasing customer rewards and incentives of frequent flyers that are loyal customers, while gaining new customers that are profitable too. Continental Airlines contributes its success to the quality customer service and customer satisfaction it provides by expanding its routes and serving meals on every flight. Some airline companies have gone bankrupt while others simply choose not to improve their quality of customer service. As a result, customers have become irritated due to the lack of reasonable rates, delays, and strict rules of other airline companies.
In closing, information technology is essential for airline companies. Some airline companies may choose to stick with basic airline technology. However, an airline company can enhance its level of customer service and profitability based on the type of changes it needs to make. Executives of an airline company can look to its IT department to strategize ways to utilize information systems that best fits its goals, business practices, mission statement, customer service, and customer satisfaction.
