7 surprising ways that airlines are mining your personal data

7 surprising ways that airlines are mining your personal data

Airlines are becoming smarter at connecting the dots between you, your frequent flyer profile and your online activity – and turning that trail into another source of revenue.

The boffins call it ‘big data’: finding links and correlations between many seperate pieces of information.

And airlines are beginning to realise not only how much of this data they have at their fingertips but how they can mine that rich data-load in ways you might not expect.

Every interaction which frequent flyers have with an airline today is logged, stored and data-mined as a vital new data point to build a clearer picture of who you are and how the airline can micro-target you with everything from ‘personalised' fares to double status credits deals.

1. Search for a flight on the Virgin Australia website, and within days, you'll begin seeing advertisements on other sites you frequently visit. Commonly known as re-targeting, Virgin Australia uses your flight search history combined with local weather information. Is it stormy in Sydney or Melbourne? Here’s a great deal on fares to sunny Queensland!

2. In 2016 Qantas stumped up a multi-million dollar investment in Data Republic, a data exchange platform which allows large organisations to share and exchange data in a secure environment. One example of how this could be used: you call Westpac (also an investor in Data Republic) to cancel a credit card, and the bank knows you are a Qantas Platinum frequent flyer and have a greater affinity to Qantas than to Westpac. Of the many incentives which Westpac might dangle to encourage you to keep your credit card, this tells them that being offered extra Qantas points will have a higher value than waiving the annual fee.

3. Ever wondered why frequent flyer programs offer those attractive bonus point deals or double status credit promotions? Yes, they drive ticket sales… but under the hood, the airline’s business intelligence teams analyse this information to understand which frequent flyers are driven by promotions, and future member-specific marketing material is adjusted accordingly.

4. Most airline loyalty programs run dynamic big data models to accurately predict your response to their marketing promotions. For example: the more you search for an award flight where you can use your frequent flyer points, the more leisure deals you'll start receiving in your email inbox.

Why? Because award bookings are generally linked to holidays rather than business trips, so your profile will temporarily be given a 'member is planning a holiday’ tag.

5. Qantas, Emirates, British Airways, Finnair and United Airlines are testing ways to 'personalise' ticket prices based on who you are and what fares you’re previously purchased. You could end up seeing the same trip as another frequent flyer but at a different price.

If the airline feels you’re likely to pull the trigger on a great deal, the price could be lower; if you’re a safe bet for premium fares, the fare could be higher.

6. Do you earn frequent flyer points using your credit card? While loyalty programs are forbidden from using this information to target new customers, airlines can reverse-engineer your points balance and combine this with socio-demographic information (such as the home address on your member profile) to predict your income, and in turn how much you might spend on flights.

7. Airlines routinely track your current location through channels such as their own smartphone apps and where you are when you open their emails.

Armed with this information, they can create a ‘virtual world map’ to gain insight on where you live and work alongside your frequently-visited destinations around the globe.

This can be used to extract insights such as which competing airlines you’re likely to fly with, allowing for a deeper understanding of what share of wallet the airline has of your business.

Mark Ross-Smith

Mark Ross-Smith (Mark Ross-Smith)

[email protected] / @TravelDataDaily

Mark Ross-Smith is a leading authority on 'big data' in the travel industry and editor of specialist website TravelDataDaily.com
 

9 Comments

  • fxdxdy

    fxdxdy

    19 Apr, 2017 06:15 am

    I disagree on point 6.
    My wife is a secondary card holder on my CC account and therefore earns no ff points from a CC, however, she did receive an invitation to apply for an AMEX from Qantas, but I didn't.

    Simply, Qantas just has to look at all ff accounts, find out which customers over 18 are not earning points via a credit card and then send them an invitation.
    No member give thanks

  • Chris Chamberlin

    ChrisCh

    19 Apr, 2017 09:23 am

    Sure, that's a simple way to go about it, but if you've ever done a family points transfer between your account and your wife's, Qantas would know the relationship (ditto if you've ever booked a hotel together via Qantas Hotels, have the same mailing address on your accounts, etc.), so could assume you have her as an additional cardholder because she's not earning credit card points of her own... but there's obviously data that suggests a potential to sell even more points if your additional cardholder has her own Qantas credit card too, as she may not necessarily use your additional card for every purchase.

    (And then, Qantas can look at how many credit card points you're earning from your existing card to estimate your household income - they already know that x card awards x points per dollar spent, so if you're earning, say, 10,000 points per month via your credit card, you'll have collectively spent x. Some credit cards (such as AMEX) assess household income when you apply rather than personal income, so by estimating that your combined household income is x, the appropriate AMEX card can be suggested - without being too low on the points-earning spectrum or too high as to make it unattainable.)

    From the outside, it looks pretty straight forward ("No credit card? Sell them a credit card.), but as Mark has covered in the article, there's a lot going on in the background that most people won't realise. :)
    No member give thanks

  • fxdxdy

    fxdxdy

    19 Apr, 2017 09:29 am

    Oh believe me, she uses my credit card for every purchase ;)
    Members who gave thanks

    elchriss0, deva22

  • Looking

    Looking

    19 Apr, 2017 07:10 am

    Nice conceptual ideas but there is a great disconnect between the "sexy, commercial savy" marketeers who create the campaigns and the "dull, boring nerds" who mine the data. The two groups have such challenged communications that the big data fantasy will never be achieved in marketing centric firms...which is why the nerd centric Googles and Facebooks are racing ahead. 
    Member who gave thanks

    deva22

  • TheRealBabushka

    TheRealBabushka

    19 Apr, 2017 08:12 am

    We will find a way to beat number 5. What they are proposing is scandalous! 
    No member give thanks

  • moa999

    moa999

    19 Apr, 2017 09:53 am

    I remain of the view that Point 5 won't work.

    If consumers cotton on that they aren't being offered the best price, back to the fare comparison sites they go, and up goes the commission's paid.

    If airlines want people using their site they need the best price guarantee.
    No member give thanks

  • markpk

    markpk

    19 Apr, 2017 12:37 pm

    True, but there are two other factors to consider:
    1. The airlines control distribution of product - who's to say they wouldn't just restrict supply into that channel?
    2. Not everyone buys on price - and the airlines know this. Some, like myself will balance price with flexibility

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  • Mark Ross-Smith

    Mark Ross-Smith

    19 Apr, 2017 02:34 pm

    It's already here and happening!

    Without going into the geekiness of it all - dynamic pricing can also work in your favour. Imagine, if say Qantas, knew you spent $100K a year with Virgin, and you were searching for a Qantas flight.  Do you think Qantas would give you a special low price to lure you over?* Of course!

    The business intelligence driving pricing is very real =)

    *hypothetical situation
    No member give thanks

  • Jazzop

    Jazzop

    24 Apr, 2017 12:27 pm

    Most 'best price guaranteed' offers are useless.  There is usually so much admin to get your case forwarded, and then by the time they review it, the fares/rates have changed. 
    Business needs to realise people shop, they compare and they purchase.  If you want people to buy direct, give them the best price at the time they search. And there is plenty of software that can allow it.

    No member give thanks

  • Steve Hui

    iFLYflat

    19 Apr, 2017 01:35 pm

    Using data to personalise offers is still at it's infancy as the marketers are finding out how personalised it can get without freaking people out.

    When it gets more advanced, I would love to stop getting offers to redeem my points for gift vouchers - because I'm never going to spend $500 to get a $100 gift voucher.
    No member give thanks

  • grov

    grov

    19 Apr, 2017 02:16 pm

    Re point 5: Another travel website claimed that if you access an airline fare on an airline website more than once, there is every chance the fare will increase - they know you are interested...
    Member who gave thanks

    TheBigM

  • Donald Noble

    dnoble

    20 Apr, 2017 09:23 am

    And don't forget about the cookies being stored when you visit the web sites. If you continually go to say an airline site searching similar trips, they can tell you're interested and prices will reflect that i.e. start to rise. After each search, I always clear my cookies for that reason
    No member give thanks

  • Looking

    Looking

    20 Apr, 2017 09:34 pm

    The one other thing that stands out to me, and has done for some years, is that the airlines and commentary on frequent flyer programmes focus on top line revenue growth. The other half would be to identify how you make your frequent flyers become lower cost customers to serve. What are the operational efficiencies that come from frequent flyer passengers? E.g. if they knew on every flight I only ordered a G&T they don't need to carry the inventory of vodka or whisky. Ditto no need to waste time asking me what I would like to drink.
    Member who gave thanks

    JJJJJJJ

  • Linsay Hayward

    Porkster

    21 Apr, 2017 03:11 pm

    Yes they are already doing this, along with everybody else. And doing it poorly. I've bought tickets to the USA, now I'm targeted with, guess what?, flights to the USA. Bit late and is more annoying that random destinations.  They have yet to figure out that I like cheap fares for places in off season and that I never buy their rental car or hotel deals, wish they would hurry up and get it right, before they lose me because of poorly targeted ads.
    No member give thanks

Guest

20 Oct, 2017 01:46 am

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