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
grap
hy by C
hris Co
ne
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