Case Study 5.1: Making Decisions Using Machine Learning At Lufthansa

The Lufthansa Group is the world's largest aviation group in terms of revenue and the market leader in Europe. Lufthansa is at the forefront of big data analytics in the airline industry. Customer data based on millions of individual interactions is delivered in real time, presented at the correct moment, in a form that is easily understood so immediate decisions are made. Here are two examples of how Lufthansa leverages big data for decision-making.

Improving the Customer Experience

When it comes to customers, Lufthansa uses big data to:

• Remember customers' interactions with personnel;
• Recognize customers (online or in person), especially high-value customers such as first class, frequent flyers, and brand influences;
• Use data from customers to expand services for all their travel needs;
• Anticipate customer preferences and be ready to address them;
• Improve the convenience of customer interactions; and
• Be there when the customers need them, in real time.

How are they doing this?

Lufthansa uses AI to mine the big data they collect. They create models that are analyzed by machine learning systems. For example, they developed an application for the agents in their call center. In partnership with IBM, an expert system lets agents ask the system questions in conversational language. The AI system taps the ticketing database and other data sources to locate a similar situation that has occurred before. Then, the system offers an optimized solution. Call center agents love it and have gained confidence in the answers generated by the system. Lufthansa benefits from the rapid ability of an agent to respond to a customer concern, and they are less dependent on employees' experience.

Predicting Flight Demand

Lufthansa partnered with Canadian travel expert Hopper, which as one of the world's most innovative apps. Using powerful machine learning and AI, Hopper analyzes trillions of data points, allowing it to make precise travel recommendations for flights and hotels to its over 35 million users. Lufthansa partnered with Hopper to use big data models for flight-demand forecasting. The project will use AI to learn customers' preferences on a deep level to provide recommendations regarding upgrades and additional services.

Discussion Questions

1. This case describes Lufthansa's use of AI to improve customer service and predict flight demand. Conduct some research and discuss another way that Lufthansa uses big data for decision-making.
2. What are the privacy issues related to the use of big data to personalize marketing? Discuss the pros and cons of using data without customer knowledge.
3. Explain whether you believe that AI will someday eliminate certain jobs such as call center employees? What are the pros and cons of AI for employees?