The airline data and information dam is breaking and like any spilled water, it is creating disruptions both upstream and downstream. Upstream is where the current and past airline operational data reside and downstream is where the exponential growth of information technology is going.
However, “moribund” best describes many airlines’ technical information systems driving operations and maintenance.
Two intersecting factors will change this: the great strides in improved aircraft reliability and safety, and the rapid advancement of information technology. This is opening the door for opportunities to exploit voids in airline operations data systems with products and services which technology can improve and create profit centers. Since the Paris Air Show, we have seen major OEMs such as Boeing, Airbus, Honeywell and GE as well as companies such as IBM and AT&T and large consulting firms like Accenture announce new ventures and products utilizing analytics, potentially resulting in the most significant step change in airline operations since jet aircraft.
Today’s airline system evolved with rules and regulations based on a craftsman mentality. That entails depending on individuals and each airline to have the capability to analyze problems, create effective operational systems and have sufficient analytical capability for monitoring and analysis.
Our MRO analytics programs threw out very large nets to catch tuna, and while they did that, they also caught much else, wasting valuable resources. Now the analytics and technology are available to catch just tuna. So instead of setting a maintenance interval for the whole fleet, with today’s technology the limit can be set precisely to monitor an individual part’s condition so that intervention can be done as needed.
This march of technology will transform airline operations into a more data-driven and analytically dependent process than being just experience-based. I am not belittling experience but saying that experience will be enhanced and validated by analytics, and most importantly, it will be systematically preserved. To me, this is inevitable.
It is important to recognize who is leading this change and creating dependence on information and analytics: major OEMs, information technology giants and major consulting firms—but not airlines.
This will require airlines to depend on major companies across a broad spectrum in the way they manage their operating specifications, supply chains, planning, MRO and operations. Those who control the data and analytics will be the beneficiaries of the future aviation aftermarket.
Let’s consider how this transition can transform the aftermarket. Some concepts sound good but add little to the overall economics and improved service levels. For example, improved tools or analytics for line maintenance technicians to better solve aircraft anomalies is not unimportant, but if you believe Boeing and Airbus that their aircraft are more than 99% reliable, then any improvement is small.
However if the analytics of individual airline data delves deeper into airline operations and begins analyzing inventory needs, another avenue is opened. Each airline in its initial provisioning has a certain level of safety stock, so in total carriers are holding too much inventory. The best aircraft-part turns at airlines are less than two per year. But with today’s technology, how close can we come to just-in-time purchasing and delivery? What if we produce just one turn better, which reduces the need for inventory by nearly 50%? Will the next step be an Amazon-like venture that buys up inventory and establishes a distribution system, lowering costs and improving availability?
What about outcomes from IBM’s Watson and cognitive computing? While there is so much focus on downloading and connecting inflight data, how do we capture more mundane information such as shop findings, man-hour utilization and not just what fails but what doesn’t? Such data resides in the bowels of airline record- keeping and does not get the benefit of more intensive analysis. But it is a treasure trove for greater efficiencies if it can be mined.
One unanswered question remains: Operators are responsible for their ops specifications, but if they depend on someone else for analysis and monitoring, how will the system accommodate this inevitable future?
Because of technology’s relentless progress, this question and many others will be answered as the benefits of this evolution become obvious and are integrated into the aviation system.
Ray Valeika advises airlines, OEMs, private-equity firms and lessors. He was Delta Air Lines’ senior vice president for technical operations.