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CASE STUDY REPORT: CONTINENTAL AIRLINES

Preliminary Investigations For Continental Airlines Case Study

Introduction
This a preliminary investigation into the Continental Airlines Case, on how implementing
the B.I system helped the company to move forward on their go forward aggressive plan,
and changed their status from worst to first, then from first to favourite. This report
prepared for B.I assignment (1).

Summary
Investigate the continental Airlines case, and their business position from 1994 to 1997,
the transformation that happened after joining Mr. Gordon the company, and initial the
Go Forward business plan. The investigation will look into the positive change of
company status, and the factors that are involved in this miraculous change in their
business position. This investigation will find out about this successful transformation,
and the tools used to achieve it.

Findings
Continental Airlines had business issues and profit loss since 1984. In the 1990s, the
company ranked bottom of the airlines' list of the US Department of Transportation. Its
performance level in every category of airlines services were the worst, performance,
baggage handling, booking, accommodation, and customer satisfaction was the worst.
The company had to file bankruptcy twice in the 1983 and 1991.

Besides the company falling business, their IT section contributed to that. At that time,
the company lacks the information sources on their business and customers. Continental
Airlines outsourced their information system, and had basic access to the data stored in
the legacy applications in sort of limited reports. The company IT operation was running
on IBM mainframe an old 1960s legacy system called Transaction Processing Facility
or T.P.F. It was very common on the industry, "says Mike Natale, Continental's staff vice
president and CTO.It's a very inflexible system, and it wasn't designed for customer
service."

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The company IT operations were in a chaos, the used systems were mixed up, it was
impossible to track a customer route with more than one stop, because the lack of access
to integrate detailed information, such as booking, schedule, customer data, marketing
plans, etc... Some customers
took advantage of this mess
the company had about 40
CRM

different

systems.

There was a lack of ad hoc

queries, without any ability to
analyze the historical data.
Every department controlled
their own information, result
on

fragmentation

and

inconsistency in the gathered data. Moreover, no one was responsible for reconciling the
differences and consolidating data at the management level.

All the above factors contributed to the company falling and losses. Conclusion the
company future was unknown.
The benefits of implementing Go Forward Plan

First Stage: Worst to First

It became a necessity for continental Airline to change their business strategy and operational
plans, Gordon Bethune, the CEO at that time, realized the need for this change. Bethune
started the process or re-evaluating and restructuring the current departments and operations,
understands the customer, control the cost, make sure of reliable operations, and create a
company culture where people and employee will love to come to work. By that
understanding, Bethune initiated the Go Forward plan.

Under this stage, Gordon Bethune, upgraded the airline fleet, reorganized the management
structure, (e.g.: Bonuses system for the top management, determined by their performance
assessment.), and new destinations' routes were added.

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Second Stage: First to Favourite
By the end of stage one, the company had significant improvements in their operations and
reputation, but still Continental had not addressed the information issues that were limiting its
ability to learn more about the customers. This stage concern was more toward the
development of the IT structure.

Back at 1995, there were few proprietary applications and almost no infrastructure that can
support the employees to get quick access to the data and key insights about the business.

Gordon Bethune by initiating his plan, he knew that the airline wont move forward so far
without the support of its information system, he had a vision of the company put all the
information the employee need at their fingertips, because with the up-to-date information,
people will not only make the right decision, but even will spot new opportunities.

He believed that a well-informed management can take a precise decision, and create an
environment of contribution that impacts the company operations.

At 1997, Continental Airlines decided to implement the Enterprise Data Warehouse (EDW),
as the foundation for the real-time (BI) business intelligent environment.

The company IT group was giving the responsibly for the project, and started the
implementation with the guidance of some basics, such as:

The development of EDW is in-house.

The company users own the EDW. They do with the data what they want, and not the
IT group which is managing it.

Implement one subject area at a time; the subject area is the source of EDW, which
represent the company business functions, such as booking, revenue, customers,
human resource, public relation, payroll, etc...

Make real-time data available where and when need.

Janet Wejman, Continentals CIO at that time, was charged with developing the EDW inhouse plan.

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Wejman, understood her role and how it is important to find a system that provides the
management with the capability to track the operations and development at the same time, and
to integrate the customer information with this system. She understood how critical better
optimizing operations and revenue is vital to Continental future success.

The implementation of EDW has shifted to the company from being at the bottom of airlines
list, to be the first. The company had gained control over its operations, management,
customers information, revenue, achieving a better performance and ROI rate.

At this stage, the operational process of EDW was limited to historical data. Continental
Airline had a long-rang vision. The management knew that to achieve company future goals,
they must provide the access to a detailed, accurate, and up to date information across the
company, to enable the employee to take the right and timely decision, and discover any new
opportunity.

Thanks to long-term vision, the earlier development of EDW had the consideration for future
improvement, and the need to move to ADW environment. The architecture of ADW
planned from the beginning.

Later, Continual Airline has partnered with Teradata Co. to create an Enterprise data
warehouse that supports 1,290 users who access more 40 subject area and 29 applications,
from 25 operational sources; schedules, reservation, flight management, customers profile,
maintenance, employee and payroll, and customer care.
In year 2001, the real-time data were available in the data warehouse. Used for tacticalmaking decision, or in spot decision, in Management, customers relation, flights information,
revenue and accounting.
Successful Business Intelligence Implementation

The system has given the company full view of customers profiles, allowing them to identify
the valuable customer and frequent flyers, provide the best service, attract new customers,
reduce booking issues, and better baggage handling.

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Making real-time data available was a critical decision in company strategy. ADW provides
timely, detailed, logically consistent store of data for strategic and logistic, and even real time
business decision making.
Differences between the traditional data warehouse and a real-time data warehouse,
as was implemented at Continental.

EDW historical data has provided Continental Airline with a better and more efficient
strategic decision for the long-term plans, while the ADW real-time and up-to-date data
provided the advantage of taking effective tactical decisions related to day-to-day operations.

Comparison between EDW & ADW For Continental Airline

ADW
integrated, logically consistent store of detailed
data, operational data is available up to date
Critical situations can be analyzed and
addressed as they occurred
High-value customers can be identified on spot
Respond to flight delays and rebooking
efficiently and quickly.
Logistical and operational issues solved on
spot.

EDW
Old history data

Could not be analyzed lack current update

Lack this ability
Could not be done

Take time to be solved.

Implementing EDW and ADW created a proactive customer relation management, having
access to sophisticated customer segmentation data, and the ability to see a single, real time
profile of any customer, the CRM team can make a very effective decision on how to serve
their customers.
Business Intelligence solutions towards business analytics

It provides the company with better optimization for its functions. Having real time data, will
help the company to improve its business functionality. For example, having a dynamic
reporting and responding to flight delay, maximize use of resources, minimize customers' re-

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booking issues, maximize the use of aircraft, forecasting future demand, and identify and
prevent any fraud activities.
It provides more creative problem solving methods, with the ad-hoc access to both historical
and real-time data across the organization. The employee can spot the problem earlier, and
analyze new issues and come up with better innovative solutions.

Applying EDW and BI systems even has more benefits and major impact on RIO, for
example, Continental Airlines; gain $250 million in total cost saving in the first five years of
operations, and an annually saved $31 million for business operations from EDW. Adds to
that in 2002, there was about $15 million prevented fraud.

Dashboard role towards competitive intelligence

Dashboard systems' role has become vital to any organization seeks excellence, and rule
over its competitors. These systems affect business productivity and efficiency. A
dashboard system provides a rich interface with information displayed in a graphical
mode using a variety of performance measures, including tables, charts and gauges. These
measures combined together reduce the organization time when it comes to analyzing the
data from database source, and that will help the organization in automating its business
decision making process.

For flight operations, real-time software has been developed for certain objectives, such as
safe travel, time management, and efficiency. Continental Airline works hard to provide
the best service they could. One of the developed software is the Flight Management
Dashboard, which resemble how the company uses real time BI.

Flight Management Dashboard

Its a dashboard management system designed and developed by the Continental Airline
IT group, the input coming from the field operations team at the airport operations docks.
It intends to help and support the operations to run more efficiently, by identifying and
avoiding the issues in the airport network, and manage effectively the flights to satisfy the
company customers.

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An example on how the graphical display of this dashboard can help Continental
customers is the display of a graphical depiction of a concourse (Figure 2). It used to
confirm and point where Company high value customers current location, or will be at
the airport; from Figure 2. It shows the gates where these high valued customers may
face potential problems so that the field agents, customer supervisor, and other operations
managers can provide assistant, so these customers wont miss their flights.
From Figure 2, the Flight 678 will have a 21 minute delay to Gate C37. There are three
high valued customers require assistance at Gate C24, where they are having only 12
minutes to catch the flight (Showing at the bottom right side box). Another 5 valued
customers at Gate C29 will probably need the assistant, and they have only 20 minutes.

In

Airlines'

business, on-time
arrival

is

an

advantage.
Continental
Airline values this
advantage, so it is
an

important

aspect

of

operational
measurement.
Therefore, here is
another system of
dashboards that support and assist company Operations keep track of the arrivals and
departures of flights' status.

See Figure (3); It displays the amount of traffic between three hub stations and the rest of
the network. You can notice the thickness of the lines connecting these nodes is an
indicator relative to flight numbers and number of delayed flights so the field staff can
foresee where they need to expedite the services. The numbers shown in Figure (3) are
the ratio of the number of late flights compared to total flights between hub stations.

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In this dashboard the
staff can click the lines
that connect the hubs to
drill down further and
see the individual flight
detail. Clicking another
line summarize flight
delay. More detailed pie
charts

that

display

further information such

as the flight category
can be provided when
the

employees

drill

down further. Different pie charts can be provided by the dashboard system, shows critical
statistics with more concentration on any area of the Operations.

The elements presented in this dashboard system, provides the operations team with a
very high level of graphical reading and targeted details, which can be broken down to
more precise statistics and figures on customers and flights schedules.
The dashboard system presented here shows the advantage Continental Airline has on the
Operational level, through improving flights' management, better handling and reducing
lateness times.
Strategic advantage Continental Airline derived from the real-time system

The emergence of real-time BI systems, organizations' decision support has expanded to

tactical level, where the information from this level used to support the operational
decisions.
Continental Airline after implementing the BI systems, managed to combines strategic
and tactical decision support. For example, ad-hoc queries, operational software queries,
and other data are set by different priority levels. The service manager monitors in realtime these queries and data and notifies the warehouse staff members when there is any
out of order operation or delay, to set or change the priority, and investigate the
performance.

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$30 million Continental Airline had invested over the last few years on hardware,
software, and technical expertise, that has given the company advantages over her
competitors in the market. Continental had a revenue increase and cost saving for over
$500 million, which add to RIO over %1000.

Besides revenue increase and cost saving, Continental Airline, managed to compete with
better ticket prices, customers increase, and fraud detection. The following list will
provide a better look on the advantages Continental Airline has in its departments and
operations.

1- Marketing

Integrating BI software in its marketing operations such as target marketing,

loyalty management, campaign management, produced for Continental Airline
$15 to $18 million yearly, in a form of incremental revenue.

Using CRM (form of BI software) provided Continental Airline with another

$150 million in one year, while the rest of the industry declined five percent.

2- Corporate Security

$7 million in cash was collected after using real-time BI, which provided an
early identification and preventing for over $30 million fraud operations.

3- Revenue Management

BI system provided better forecasting for customer and business demands,

which result in $5 million incremental revenue.

BI helped to the company earning $10 million annually, by providing

information for analysis on fare sales impact.

Overall, applying and integrating BI system in Continental Airline, has moved its
business to a different level, and distanced the company from its competitors, providing it
with the tactical advantage that saved the company fortune of cash, and moved its
position from bottom to top increasing its customers, and reducing the rivalry gap.

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Conclusion

Continental Airline by the Go Forward Plan of Gordon Bethune Continentals CEO, and
his employees has succeeded in reviving the company business. They managed to
improve their customer services and internal operations, increase the revenue and lower
their running cost.

By early recognition of the critical role of IT systems and BI intelligence, the company
managed to develop its data warehouse in 1998, and implement the real time BI by the
year 2001, to provide the real-time information that supports its tactical decisions, and
achieve its future expectations.
Today,

the

warehouse

team

is

working

to

improve

the

current

subjects

(operations/departments) performance, and convert more subjects into real-time. The

Company business strategy and real-time BI have reached a high degree of syn. The
warehouse is maintained by the IT group, while the business departments develop their
own applications, to make use of warehouse data and BI system.

Continental Airline by implementing its innovative Business and IT strategies has

managed to achieve its Worst to First, then First to Favourite business strategy and
become one of the best companies in this industry.

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REFERENCES:
1. Continental Airlines Case Study: Data Warehouse, Teradata.

2. Beyond metrics & Dashboards: User relevance is the key to finding meaningful
information in scorecards and dashboards. June 2008, by Cindi Howson

3. Real-time Business Intelligence: Best Practices at Continental Airlines, Written by

Hugh J. Watson (University of Georgia), Barbara H. Wixom (University of Virginia),
Jeffrey A. Hoffer (University of Dayton), Ron Anderson-Lehman (Continental
Airlines), and Anne Marie Reynolds(Continental Airlines) Information Systems
Management 2006 Copyright Taylor & Francis
4. Business Intelligence Dashboard in Decision Making, April 23, 2010 Bhumika
Hansoti, Purdue Univeristy.

5. Business Intelligence Maturity Model, Wayne Eckerson Director of Research The

Data Warehousing Institute

6. Continental Airlines, Ziff Davis, CIO Insight. July 2006

7. Continental Airlines Flies High with Real-time Business Intelligence, Ron AndersonLehman Staff Vice President, Technology, Hugh J. Watson* Terry College of
Business University of Georgia, Barbara H. Wixom McIntire School of Commerce
University of Virginia, Jeffrey A. Hoffer School of Business Administration
University of Dayton
8. TERADATA CASE STUDY: CONTINENTAL AIRLINES,

by Judith R. Davis,

December, 2005

9. Where Is That Passenger?

Using detailed integrated PNR data to improve forecasts for show rates and customer
cancellation rates, By Monica Smith and Yen T. Tsai, Travel & Transportation,
Industry Consulting, Teradata Corporation.