ccording to conventional wisdom,

data warehouses are only for large,

established enterprises. Yet some innovative

thinkers see things differently.

The founders of Skybus Airlines, a pri-

vately held startup based in Columbus, Ohio,

shared a vision for reshaping the air travel

business. From takeoff, an active data ware-

house has been an essential contributor to

the airline’s success.

“The traditional airline model really

hasn’t changed in the last 50 years,” says Bill

Diffenderffer, CEO of Skybus. Most airlines

use a hub system to gain flight efficiencies,

and they rely on legacy computer systems to

manage customer data and the reservations

process. As a result, getting information and

booking flights can be a slow and frustrating

process. Worse yet, air travel is often marked

by delays, aging equipment, poor customer

service and high cost.

“We thought there was still a tremendous

opportunity” to improve on these opera-

tions, Diffenderffer says. “We envisioned

Skybus as the first e-commerce airline,

which is a very different starting point”

from existing airlines. Modeled on the

success of Ryanair in Europe, Skybus has

taken steps to shake things up—such as

flying highly utilized new aircraft into only

non-congested airports, using a point-to-

point route structure, deploying extreme

operational automation and conducting

100% of its ticket sales and customer

support on the Internet.

The ultra-low-cost carrier employs a

small fleet of new Airbus A319 full-size jets,

which fly non-stop to cities across the U.S.

At least ten $10 tickets are available for each

Non-stop route to growth

A

Startup Skybus Airlines deployed an active data warehouse, creatingan information lifeline that supports its visionary approach to air travel. by C.A. Doyle

TeradataMagazine.com

Photo

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CASE STUDY

Alicia Acebo, an IT consultantand acting Skybus CIO,and Bill Diffenderffer, CEOof Skybus, say a Teradatawarehouse is critical to theairline’s success.

PAGE 1 | Teradata Magazine | March 2008 | ©2008 Teradata Corporation | AR-5547

flight, and other seats are sold at discount

prices. The airline generates additional

revenues from on-board sales of meals/

beverages and gifts, fees for checked bag-

gage, as well as advertising inside and

outside the planes.

Since its first flight in May 2007, the com-

pany has expanded operations into 17 cities.

A second operational base near Winston-

Salem, N.C., will open in early 2008. The

carrier has already placed firm orders for

65 more jets. Skybus is financed by num-

erous high-profile investors such as Morgan

Stanley and Fidelity Investments and is

backed by the expertise of several airline

industry leaders.

Technology takes offDiffenderffer recognized early that sup-

porting the Skybus operations would

require a powerful, high-performance

information infrastructure. The airline

needed to have real-time information to

support corporate decision making and

provide fast, transparent flight choices to

customers. Working with $160 million in

equity capital, the carrier quickly created

the heart of its new operation: an active

enterprise data warehouse.

Although some startups think they

are too small to need data warehousing,

Diffenderffer said he never had any doubt

that the data warehouse was a worthwhile

investment. “We knew we weren’t going to

do without it,” he says. “It would be like

saying you could build a human being

without an arm. That just wouldn’t work.”

Diffenderffer hired Alicia Acebo, a highly

regarded IT consultant, and her team. Act-

ing as CIO, Acebo, principal and founder

of Rock Paper Data, a data management

and data warehousing consulting firm, was

charged with bringing the active data ware-

house vision to reality. “Skybus needed to

be able to access information easily and in

real time, measure key performance indi-

cators and act quickly on changes in the

marketplace,” she explains. “It was only

natural to assume the company needed

an enterprise data warehouse, and the

only platform that could meet these goals

is Teradata.”

With the CEO as champion, the airline

began building the IT infrastructure and

data warehouse. Each of the Skybus devel-

opers had an average of 15 years of experi-

ence working for other airlines, which gave

the group a jump-start on understanding

requirements and modeling questions. With

experience, funding and infrastructure in

place, progress was rapid.

The data warehouse, built in just one year

by only five developers, currently includes

data about flights, operations, crews, all

ancillary sales (food, beverages, gifts, car

rental, travel insurance and hotels), fuel

usage and cost data and booking records

from the reservation system. All customer

correspondence—including e-mails about

flight reservations, online check-in and

payments—is automatically generated from

data in the warehouse.

“Creating a data warehouse from the

ground up, not as an afterthought, meant

that we could have system integration and

data management tightly coupled,” Acebo

says. “We could have one version of the

truth captured at the lowest level of detail.

Users can slice and dice the information and

ask questions. They have information and

knowledge based on fact, which enhances

their business acumen.”

Real-time data lifts revenuesWith the infrastructure in place, Acebo

and her team began creating and deploying

CASE STUDY

An enterprise data warehouse is vital to support the business model of Skybus and provideright-time information to customers.

Figure Skybus information architecture

PAGE 2 | Teradata Magazine | March 2008 | ©2008 Teradata Corporation | AR-5547

applications. A key development was a best-

fare cache that uses the data warehouse to

compile information about schedules,

inventory, pricing and reservations. The

information is displayed in real time, making

it easy for customers to identify flight or cost

options between any two cities within a six-

month timeframe—in just six clicks or less.

Industry experts familiar with Skybus’

plans said it could not be done. Even when

the cache was complete, the naysayers did

not believe they were seeing real data. Yet

customers have embraced the system.

“For our business model to work,

we need to stimulate traffic,” explains

Diffenderffer. “We wanted the system to

be so transparent that customers would buy

even more tickets than planned, whether for

additional trips or for a travel companion.”

Because the system is easy to use and the

fares are low, sales have been brisk. “People

love our Web site and they love doing busi-

ness with Skybus,” says Diffenderffer. “The

Web experience gives them confidence in

us, which is a tremendous advantage for an

airline that has only been flying for months.

When you think about the return on that

best-fare cache, it’s enormous. And we

couldn’t do it without the underlying infor-

mation architecture and the data warehouse.”

The data warehouse also supports

revenue management. With fuel prices

skyrocketing and customers resisting higher

fares, increasing revenue is a primary

challenge for all airlines. “The art of revenue

management—how your revenue floats and

how your fill patterns and load balance

stack up—is balanced by the science, having

quality data in real time to support decision

making,” explains Jim McMahon, chief

operating officer of Revaero, a revenue

management consulting firm based in

Dublin, Ireland, that supports Skybus.

The warehouse data supplements the

airline’s Navitaire Skyprice revenue man-

agement application. For example, analysts

can request that Skyprice list all flights with

a load factor (i.e., the percentage of seats that

have been sold) greater than a specified

value. Pulling the information from the

Teradata warehouse, this list can display all

flights with available seats in certain booking

classes. The analyst can use this information

to manage fares on those flights.

Reports created by the IT team enable the

revenue management group to interrogate

the data and quickly get answers to everyday

questions. Real-time data—unavailable at

most traditional airlines—helps the depart-

ment track sales as they happen, rather than

as a historical event.

“If we adjust a fare, we know in the first

few hours how our average fare and

booking volume has responded to the

change,” explains Josh Flyr, director of

revenue management and scheduling for

Skybus. “To the extent that this industry

continues to drive more toward direct dis-

tribution and e-commerce, the timeliness of

the data will become more of a competitive

necessity,” making the active data warehouse

even more valuable.

Flight plan for growthSkybus also uses the data warehouse to

track customer origination trends. Although

the airline originally expected most of its

customers to come from Ohio, the data

revealed that a large percentage of its clien-

tele originates from surrounding states—

the “outmarkets.” “This tells us a lot about

the effectiveness of our fares and our mar-

keting,” says Diffenderffer.

Although it is too early to quantify any

return on investment for the data ware-

house, Acebo says that the value is clear.

“How do you measure the benefit of having

real-time information at your fingertips?”

she asks. “What is the value of having every

user querying against the same data, in one

place, so that you get one view of the busi-

ness? When reports become a lifeline for

executive decision makers, you cannot

underestimate that value.”

In the next five years, Skybus plans

to grow to a fleet of 80 jets, adding new

cities and routes to meet demand. Each

step forward will be supported by the

data warehouse, which will acquire

additional data sources, including

maintenance information.

Yet Skybus has bigger plans, including

broadening the concept of an e-commerce

airline. “We think there are ways to dynam-

ically package offerings—such as hotel, car

and air—so that people can quickly make

decisions,” says Diffenderffer. “We can do

for leisure travel what our calendar and

best-fare cache do for business travel in

terms of creating transparency and the

ability to understand and choose options.”

As the company grows, Skybus expects

the Teradata solution to remain at the

center of its success. “A company that

doesn’t understand the data can’t under-

stand its own business,” says Diffenderffer.

“We now have a rich data environment

that lets us pull out elements relevant to

any particular decision, which is critical.

We’re confident Teradata will enable us

to grow as we move forward.” T

C.A. Doyle writes about high-technology

topics for numerous publications

and businesses.

Behind the solution:Skybus Airlines

Database: Teradata Database V2R6.2.0

Users: 300 users

Data model: Third Normal Form (3NF)

Operating system: Windows XP

Storage: 2.6TB

Teradata utilities: Teradata Tools andUtilities 8.1 FastExport, FastLoad,MultiLoad, Teradata Dynamic QueryManager, Teradata Manager, TeradataTPump; Teradata Utility Pack - ODBCDriver and JDBC Driver

Tools/applications: MS ReportingServices

PAGE 3 | Teradata Magazine | March 2008 | ©2008 Teradata Corporation | AR-5547