Predict Airline Customer Lifetime Value

Business Problem

According to the International Council in Clean Transportation, approximately 12 percent of Americans are responsible for 2/3 of all US air travel. In such a concentrated market, it is imperative for airlines to accurately calculate a customer’s lifetime value. At a customer level, an airline has a number of levers available to ensure a customer remains as loyal as possible. Understanding the future spend of a customer allows airlines to tailor the customer service proposition as well as informing priority on operational decisions like upgrades, seating and offloads.

Intelligent Solution

AI will help your airline calculate customer lifetime value more accurately by using advanced classification and forecasting techniques. Using historical data, AI can be used to predict the total amount each customer will spend with your airline over the next 1, 3, 5, or 10 year timeframe. This can be done by coupling transactional data with loyalty/CRM data to build a single view of the customer. Using this insight alongside share-of-wallet data (which can often be ascertained from survey data), will allow your airline to make more informed decisions to ensure high-value customers are appropriately treated as such.