Under the hood of Virgin Australia’s customer and business analytics approach

Building a customer demand-led approach to travel management, predictive personalisation and foresight, not just insight, are all in the sights of Virgin Australia’s analytics chief.

Speaking at this week’s SAS Global Forum, Virgin Australia head of analytics, Paul Tran, spoke on the airline’s growing use of analytics to drive business and customer decisions and provided a peek under the hood of how the airline is working to improve profitability and services as the aviation market starts to cover.

As Tran put it, Virgin’s analytics team is there to help people across the organisation make informed decisions that are good for the business and the customer. “We need to be pragmatic about that. It needs to be a win-win for customer and for the business,” he said.  

During Virgin’s administration process and the wider shutdown of airline services in Australia, an immediate area of focus for analytics was on protecting the Virgin Velocity customer loyalty program still very much running.

“One thing we immediately focused on was how to protect that business and make sure customers knew it was still operating and their points are still protected,” Tran said. “We needed to communicate with customers and know who to communicate to first. So we took a one-to-one customer management process. They needed to hear from us, that we’re OK. And we needed to hear they’re OK as well. We re-routed our resources to do that.”

Tran said it the tough time also presented an opportunity to start repositioning analytics on what was needed as business recovered so it could sit at the forefront of driving the business. This included building out tools and models to help teams manage customers it engaged with, but also what flights to launch, capacity required and the profit potentially generated.

“This was ensuring that when borders open and when we started flying again, we had a playbook,” Tran said. “An airline is always focused on the flight plan – so when a pilot gets on a flight, they know exactly what they need to go and what to do. That’s how we need to operate individual business units, too.”  

A new offering to emerge from this time was a profitability model at a customer level, something Virgin had not done before, Tran continued.

“In last three months, we built out an activity-based costing model at a customer level. We know who our most valuable passengers are, what demand looks like and to inform opening up routes to maximise capacity and demand that drives the most revenue and profit for us,” he said.