Migacore, a startup which helps airlines make sense of online data, has been acquired by Cirium for an undisclosed fee.
The startup uses machine learning to translate data from sources such as online news and social media into meaningful insights helping carriers to forecast demand.
Cirium specializes in aviation analytics and plans to expand Migacore’s capabilities and give the startup access to its own data and resources.
Airlines have been looking at how artificial intelligence will play a greater role in operations for several years to help them make better decisions.
The pandemic has accelerated the need to incorporate new sources of data such as search engine and social media intent data.
The old reliance on historical booking behavior will not be enough as airlines look to plan routes and forecast demand as they recover from the pandemic.
Cirium highlighted the challenges in its Airline Insights Review 2020 saying that shorter booking windows and scheduling windows mean airlines need to be more flexible and incorporate more real-time information to predict demand.
The company says that 40% of booking in the fourth quarter of 2020 were made last minute.
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Some travel technology companies are already filling the gap with Skyscanner, for example, recently adding an Unscheduled Routes module to its business intelligence technology.
The company believes that the way the industry has worked up to now will no longer work and that carriers will need to have access to “true travel demand.”
Tim Underwood, co-founder and CEO of xCheck, a specialist in advertising technology for airlines, agrees.
He says that right now airlines don’t have the signals they used to rely on to “anticipate the demand curve.”
The company has developed a tool called Radar which provides carriers with the same information a consumer would see when searching for flights on Google.
Underwood says: “This data source is about now at a time when your last year’s data source is kind of useless and you’re going to be stuck in that mode for I don’t know how many years. 2020 data is not going to be much use and, 2021 is not going to be much use for 2022 either.
“This is very much more about understanding where the puck is exactly now when your ability to anticipate is much reduced.”
The Radar technology uses artificial intelligence to show airlines what prices competitors are offering when a consumer searches compared to their own prices and serve ads contextually to help win bookings.
Laurent Lebard, CEO of Yieldin, says that it's also about how much has changed on the supply side.
"That’s why the data set needs to be broader than just historical data and include more timely and more granular data points. For example, if most revenue management systems use only internal data like capacity and seats sold as the basis to optimize the remaining inventory, they completely ignore real-time data points such as look-to-book ratios and real time conversion rates of products sold (i.e., fare families) incl. bags, seat assignments and other ancillaries."
He adds that going forward knowing who the customer in the seat is as opposed to how many seats have been sold.
"Demographics of current buyers and channel information will be then very insightful and can be derived from the demand that shops either directly on websites or on online portals."
Migacore, meanwhile, has already worked with Lufthansa and Singapore Airlines to help them get meaningful insight from real-time sources.
Abheer Kolhatkar, the startup’s CEO, believes the integration of its forecasting technology with Cirium’s service will “bring forward the new model that the market has needed for some time, allowing airlines to better forecast the intent to travel.”