Virgin Atlantic taps KLM-BCG alliance for digital operations

An AI-driven partnership between airline KLM and advisory giant Boston Consulting Group has been sourced by Virgin Atlantic to help optimise its digital operations. This will see a new machine learning system installed to help Virgin Atlantic manage last-minute events such as bad weather by combining data on available fleet, passenger travel plans, maintenance schedules, crew schedules, and gate availability.

Now over 100 years old, KLM Royal Dutch Airlines is the longest-running commercial airline in the world still operating under its original name. With its fleet of more than 160 aircraft, the KLM Group carried more than 41 million passengers in 2017 alone. As KLM looks to the future, it has been implementing a roster of innovative changes throughout its operations, including the launch of AI programmes to improve its operational workings.

In the summer of 2018, this saw KLM forge a new partnership with Boston Consulting Group to produce what the firms described as a pioneering AI partnership that could “revolutionise global airline operations.” While BCG had worked alongside KLM multiple times throughout the years, the move represented the first time in the Dutch airline’s history that it had collaborated with a leading management consultancy to launch an entirely new service.

Taking to his LinkedIn to talk about the partnership, BCG CEO Rich Lesser previously said, “Over the course of 18 months, BCG and KLM developed AI-based tools – through which, for example, machine learning and advanced optimisation process dozens of variables… and early impact has been significant – with 15% to 25% fewer passenger disruptions and a large reduction in delays. Working with KLM, we are now bringing this solution to other global airlines.”

Indeed, with global aviation companies coming under a number of new pressures, including environmental responsibilities and the need to quickly repair schedules for growing numbers of passengers – with minimal delays and minimised ripple effects for passengers, crews, fleet, and ground resources – there is already keen demand for BCG and KLM’s services. In 2019, the KLM-BCG partnership saw Brazilian airline Gol become the first Latin American client of KLM and BCG’s joint venture. With a fleet size of around 130, Gol is Brazil’s largest international airline, ahead of local rival Azul, and one of South America’s largest aviation players.

As of February 2020, a further contract win has seen the KLM-BCG partnership in digital airline operations appointed by Virgin Atlantic Airways to support the airline with optimising and digitising its operations worldwide. The partnership’s suite of state-of-the-art Operations Decision Support (ODS) tools based on AI, machine learning, and advanced optimisation techniques will be used to maximise operational performance for Virgin Atlantic by assisting both on the day of operations and in the planning phase.

To minimise the number of disrupted passengers, the ODS tools will suggest how to manage last-minute events such as bad weather by combining data on available fleet, passenger travel plans, maintenance schedules, crew schedules, and gate availability. Meanwhile, an in-house ODS team, consisting of business partners, data scientists, and software engineers will be set up at Virgin Atlantic. This team will be responsible for the continuous improvement of the tools in the long run as well as the development of new tools and use cases.

Sander Stomph, Vice President in Operations Decision Support at KLM and Dirk-Maarten Molenaar, Partner at BCG, said, “We look forward to helping attract, train and onboard the digital talents that will further develop and expand our solutions once implemented… Adding Virgin Atlantic as our customer is another step towards our mission to establish KLM-BCG as the global leader in digital airline operations, enabling ambitious airlines to achieve their operational targets.”

Phil Maher, COO of Virgin Atlantic Airways, remarked, “Through KLM-BCG’s platform, our team can deliver leading operational performance based on faster, smarter decisions, supporting our journey to becoming the most loved travel company… A new Operations Decisions Support team will ensure that we put our customers first every time during operational disruptions by leveraging complex operational data and creating numerous flight scenarios.”