AsiaAsia has entered into an agreement to set up a data analytics joint venture with Scotland-based company Big Data For Humans(Bd4h).
The low-cost carrier told A+M that AirAsia's data science unit MadCience Consulting Sdn Bhd has signed two agreements with Bd4h. The first includes subscribing to one million unsecured convertible loan notes for £1,000,000, of which half will be used to finance the JV between MadCience and Bd4h. The second agreement is to form a JV company called Big Data for Humans APAC (Bd4h APAC).
AirAsia said that the Bd4h data science platform will be able to automate insights and generate action plans in real-time to provide AirAsia guests with the “best offers based on their preferences across all channels.” Meanwhile the joint venture will see Bd4h building a software-as-a-service (SAAS) business in the region. This will also result in more targeted marketing and cross-selling as well as identifying of new business which will result in improvement of overall customer experience.
David Atkins, lead strategist DigitasLBi said the airlines have long realised they are sitting of a veritable gold mine of customer data.
"These are primarily the precious data that has ability to provide a profitable cutting edge through personalisation and customisation of the entire customer experience,” he said. However, the big challenge, which very few have cracked – has been the consolidation and implementation of that data across touch points, platforms and business units.
"Only time will tell whether this latest AsiaAir JV will prove a success, but it is a confident step that equips them with the ability and intelligence to succeed where their competitors have struggled," Atkins added.
Partner of Kuala Lumpur-based Entropia, Derek Tan added in a fast paced industry such as low-cost travel, data and intimate understanding of customer preference, and omnipresence understanding of travel behaviour, grants it a huge edge in potentially automating the insights, generation and action.
“Data will be the key integer in driving revenue via re-marketing, upselling and cross selling not just within the ancillary side of the business but also within Tune group. Speed and reactions to new campaign deployment or adjustments on the fly are key areas of versatility,” he said.
Understanding motivations and tweaking prices on destination will grant the airline immense ability to go beyond price wars and towards the era of brand experiences that are “customised and alive,” he added. In the long run, Tan said, the latest JV presents an opportunity for AirAsia to have a head start on a start-up business with potentially long term financial returns.
Tan said that the current practice when it comes to data is very much driven by enhancing immediate profits via marketing activations and insights. But on a deeper level, the SAAS programme will allow better relationships and loyalty built via intimate understanding that comes alive via each of the organisation and brand touch points.
"SAAS will be the new norm interface and owning its own data and enriching that via deeper slicing and dicing to its own proprietary needs is the best step towards infusing the right digital processes, culture and approach to strategy built on digitalisation," he added.
Meanwhile, AirAsia's group CEO Tony Fernandez said, "For the first 15 years, AirAsia has been a marketing and branding company and we have built a very valuable, social media savvy brand. I am excited by the possibilities offered by data analytics to grow AirAsia's business, especially in ancillary."
"These are exciting times. Data is king, and we look forward to working together with Big Data For Humans to unlock the value in our customer database as we bring AirAsia even closer to becoming a digital company," he added.