Leveraging big data: learning from Indigo Airlines

  • 01 Aug 2023
  • Read 5 mins read

What Is Big Data and why it matters

Big data describes voluminous, relative, and dynamic data. It can be either structured or unstructured but too large, and complex to be processed using traditional methods. With the growth in the Internet of Things, there is a great velocity with which data is streaming into businesses through means of sensors, smart meters etc. Big data can also be procured from various sources; numerically structured data through company databases and unstructured data through text documents, emails, videos, audio, financial transactions, and social media posts. 

The key lies in how companies can leverage big data and here it pays to learn by example. We will look at how Indigo successfully applied big data to its airline operations, but more on that later. Big data can be used to determine the root cause of failures in near-real time, spotting anomalies quicker than humans, recalculating risk portfolios in minutes, detecting fraudulent behaviour before it can affect your organization etc. MSMEs in India and abroad have been struggling in the post pandemic period. One differentiating source for these MSMEs can be the effective use of cloud computing and data analytics. But, first the Indigo Airlines story.


How Indigo Airlines leveraged big data?

IndiGo has been a remarkable story in a tough industry and has achieved a market share of over 55% in just 15 years of operation. Some of the focus areas of the airline have been punctuality, convenient timings, new routes, and competitive pricing; all were located only through the use of big data. Here is how Indigo managed to do it. 

Indigo Airlines applied big data analytics to flight recommendations, including seat, meal, and timing recommendations. This was based on mountains of customer data pertaining to their airline travel history. This was embellished with data on their past searches on other travel websites. This helped Indigo give a near-accurate prediction of where the passenger was likely to fly to next, and the kind of customized services they might expect. 

Indigo Airlines also used big data to model trends of passenger demand on the basis of time and season. For instance, during summer, IndiGo increases the number of flights to unconventional hill-station routes like Srinagar, Leh, Dharamshala and McLeod Ganj. This automatically attracts more crowd, partly because most Indians have plans to go to cooler climes during summer. They have an edge since no other airline predicts demand trends this way based on big data.

Data lessons for small businesses from Indigo Airlines

Small businesses leverage big data to identify concealed patterns, customer preferences and trends in the market to make informed decisions. In a competitive market, this gives an edge to improve profitability. There are huge volumes of data available online, and this gives small businesses a better chance to predict what their competitors are doing. Surprisingly, only 29% of companies today utilize big data for predictive modelling or operations enhancement as per a report by Accenture. 

But a key issue with leveraging big data analytics is the high cost of hardware and the need for highly-skilled labour. This can be a huge cost and in turn a huge risk, but it is probably worth that effort. Judging by the success of companies like IndiGo, Amazon, and Walmart in using data analytics for customer insights, it should work. Big data can be used to anticipate consumer demand, optimise inventory, and social media trends. For small businesses, this can be a goldmine in these tough times.