ISTANBUL s AIRPORT SWAP

Transcription

1 ISTANBUL s AIRPORT SWAP A TRAVEL INSIGHT THAT TURNS INTO ACTION by VELOXITY, Inc mobile is not a device, it s a behavior August 24, 2018

2 The Effect of The New Istanbul Airport to Air Travel The new airport of Istanbul will be in service starting the 29 th of October The new airport is expected to be one of the largest airports in the world and is about to change the travel behavior of the city s residents and travelers. This report, put together using the data generated by Veloxity SDK and processed and analyzed by Veloxity Big Data System, offers a comprehensive insight about the travelers behavior in the existing airports as well as their predicted behavior once the new airport is operational. Istanbul Airports and Travelers Airport Preferences Istanbul is a city with one of the busiest air traffic. It has a population over 15 million with a lot of frequent flyers, and it is also a hub connecting Asia and Africa to Europe and Americas. The city already has two busy international airports. The first one, the Istanbul Ataturk Airport (IST), is in the European side of the city, and is closer to the most populated areas. IST is the home of the largest airline in Turkey, the Turkish Airlines (THY), which is the top ranked airline to fly the largest number of countries among all airlines in the world. The second one, the Sabiha Gokcen Airport (SAW), is on the Asian side of the city. It is situated far from major populated areas, but has a price advantage, thus it is preferred by most of the budget airlines both international and domestic. IST will no longer exist when the new airport starts to function. THY will change its home location to this new airport. Considering that IST is the busiest airport, and the new airport location is in a remote area very far from the city, the predicted reaction of the passengers will be quite significant. Fig 1. Istanbul International Airport Locations vs City s Population

3 There are three main reasons why people choose between IST and SAW: Destination Availability, Price and Location, exactly in the same order. SAW has the price advantage. Most of the budget domestic and international airline company prefers SAW. That makes it attractive for travelers unless the price advantage disappears due to distance to their homes. IST has the location and destination availability advantages. It is closer to the mostly populated areas and it has more flights available to Americas and Africa. The new airport replaces IST and will have the same destinations. No change in prices are expected. The only changing factor is the location. The new location, being far from the city now favors SAW. Veloxity Data that turns into Travel Insights Veloxity, by leveraging its user base of 5 million active users, identified each traveler who lives in Istanbul, then analyzed their travel behavior, including the choice of the airport. Veloxity creates its own first party data by its presence in the mobile phones, through its out-of-app SDK in the partner apps. The Veloxity data does not depend on any third party or in-app data. It is based on user s online behavior in the mobile device and offline behavior when the mobile is idle but still with the user. The composition of the data is as follows: Fig 2. The Data points for Veloxity s first party data Data is everywhere, available to many. But the data itself does not get the job done. Veloxity converts the data first to knowledge then into action through processing and analyzing it with proprietary AI and rule based algorithms. This transformed knowledge can be utilized by many industries such as travel, banking, fmcg, retail, telecom, media and others. The Veloxity s unique approach of data point selection, collection and conversion into knowledge is also used in this insight to predict the success of the new airport in Istanbul. The data collected from 5 million unique users makes it possible to understand who are the people that flies and what are their life as well as travel preferences.

4 Our Process First, Veloxity identified the home and work locations of travelers within the city, as well as the airport they prefer to fly. Then, using the knowledge obtained from the data, it analyzed the life preferences of the flyers and correlated this with airport and destination choices. Below is a density map of home locations for people selecting IST: Fig 3. IST travelers home locations (by Veloxity data) As Fig 3 clearly shows, the densest area is very close to IST. The Asian side residents, except for the obligatory destinations, do not prefer IST at all. Below is a density map of home locations for people selecting SAW: Fig 4. SAW traveler s home locations (by Veloxity data)

5 The average distance of flyers homes to their preferred airport is 13 km for IST and 22 km for SAW. This is a very important fact, Fig 4 points out that SAW can collect traffic even from the European side of the city, where the bridges or the tunnel is close by. That is if the location does not disturb the traveler, the price becomes the major selection factor. FACTS: Price beats the location, up to a certain level. Destination Availability has a limited impact, as many popular destinations for locals are available in both airports. We understand that price is the most important factor if the location to people s homes is not too far. However, there are other behavioral factors that affect the choice of travel and airport. Below are the behavioral segments that are the most significant when making airport selection in Istanbul: Fig 5. Behavioral Segments that are significant for airport selection in Istanbul It is of utmost importance for all airlines that have a flight in these airports, to target the right audience with the right language. The segments in Fig 5. shows how. Predictions after the new airport, supported by Data Among the three criteria, that affects the airport selection the most such as flight availability, price and location, one is changing significantly with the new airport: The Location. So, what is the distance of the new airport to the densest areas of the city?

6 The location of the new airport is very far to people s homes, relative to the IST airport. We expect some flyers from IST to go to SAW, after the airport swap, because we know price is the most important criteria, and location favors SAW more than ever. But which area of the city, will send the biggest number of customers to SAW, instead of the new airport? It might be obvious to be able to guess that many flyers will prefer SAW to the new airport. But it is not obvious to know who are these people and where they live exactly, as it is not obvious to know how to reach them. Below is a map showing the densest area of where flyers live and prefer the IST airport. Fig 6. The densest area flying in IST The area in Fig 6. is only 6 kms (4 miles) away to the IST airport in average. The same area s distance is 35 km to SAW, a distance where price is not enough to convince anymore. The same area is 34 km from the new airport, same distance as the SAW. Now, by this change, SAW gains its price advantage over those flyers, as location is not an issue anymore. Airlines who fly in SAW can promote their flights in that area, either outdoor or digital, putting an emphasis on the location and using the right words, that would even affect Not cost sensitive, or Workaholic people. Shoppers and Cost Sensitives? They should be easy to convince.

7 Conclusion It s not a revelation that the price is the biggest factor in travel behavior. However having a price advantage is not always sufficient to influence people's airline choices. A complete behavioral analysis of the individual needs to be taken into account. Veloxity offers what's not available to the obvious by capturing true consumer offline behavior. We do know who to address, where those people are, what are their likes and habits. Veloxity s data and insights enable how to profit from the changes in travel dynamics and behaviors. Particularly for the case of the new airport and airport swap of Istanbul, the knowledge enables us to take the necessary actions to make the people fly with our airline. Knowledge about one's habits and travel behaviors enables us to reach out the right people, people that won t use the new airport, to sell them ticket by timely proposing them the right offers and conveying the right messages, regardless of whether the desired flight is from the new airport or is with a competitor.