Southwest Airlines has achieved extraordinary results in improving flight on-time performance using FICO optimization in their Baker Airline Operations Recovery Optimizer tool, winning the 2016 FICO Decisions Award for Decision Management Innovation.
Since the project's inception, on-time performance is 10-15 percent higher on days with irregular operations compared to similar events in the past, and total on-time performance is more than 2 percent higher over the past year.
The air carrier has experienced significant cost savings and customer satisfaction has improved during irregular operations as on-time performance improved and flight diversions, tarmac delays, and crew changes declined.
This project has supported the company's goals and philosophies related to passenger hospitality, operational performance and maintaining a low-cost business model.
Southwest Airlines serves 100 million customers annually with more than 3,900 daily departures during peak travel season across a network of 101 destinations in the United States and eight additional countries.
Analytics software firm FICO (NYSE:FICO) today announced that Southwest Airlines has been awarded the 2016 FICO Decisions Award in the Decision Management Innovation category for its Baker Airline Operations Recovery Optimizer tool. The Baker, as it is referred to by Southwest Airlines, is the airline industry's first real-time, integrated recovery solver that generates solutions to operational disruptions such as maintenance problems and weather events, while minimizing the impact to passengers and flight and ground crews.
Since its implementation in November 2015, Baker has yielded significant cost savings by demonstrating significant improvement in key metrics such as on-time performance (OTP), customers delayed more than two hours, and mishandled luggage. On days with irregular operations in which more than 2 percent of flights were cancelled, OTP was 10-15 percent higher than similar events in the past – equating to more than 2 percent increase in OTP since the tool was launched in November 2015. During a blizzard in Denver last year, for instance, OTP was seven percent higher than a comparable airline that did not take proactive action.
"Prior to the Baker implementation, superintendents of dispatch would address airline problems with a manual, labor-intensive process that could take hours to work out a single solution," said Phil Beck, manager, optimization solutions at Southwest. "Not only does this tool enable them to quickly react to problems within minutes, but they can also get ahead of potential disruptions hours in advance and have time to evaluate multiple scenarios. This project has supported the company's goals and philosophies related to passenger hospitality, cost avoidance and operational performance."
Using FICO® Xpress Optimization Suite, the Baker utilizes several algorithms, advanced in-memory cache technology, and hundreds of carefully calibrated parameters to achieve real-time performance and high-quality, integrated decision-making. The Baker team worked closely with Southwest's Superintendents of Dispatch for years prior to launch, incorporating business knowledge and best practices gained from their decades of first-hand experience.
"Southwest achieved an industry-first solution to a well-studied problem," said Jim Bander, national manager, Decision Science, Toyota Financial Services, a judge for this year's FICO Decision Awards. "The Baker project has several obvious benefits for its back-end operations and profitability, but at the end of the day, the real winners are the passengers who can get to their destinations without delay, and the crewmembers who can complete their assigned shifts as planned. Southwest is solving real problems for real people."
About the FICO Decisions Awards
The FICO Decisions Awards recognize organizations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based upon measureable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology. The 2016 judges are:
Dan Ariely, expert on human behavior, author of Predictably Irrational, and Duke University Professor of Behavioral Economics
Jim Bander, national manager, Decision Science, Toyota Financial Services (2015 winner)
Ken Elliott, global director of Analytics, Hewlett Packard Enterprise
Bill Fearnley, Jr., research director, Compliance, Fraud and Risk Analytics, IDC – Financial Insights
Petr Kapoun, retail risk director, Česká Spořitelna (2015 winner)
Dr. Dalvinder Singh, editor, Financial Regulation International
About FICO FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 170 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.