Ticket to fly: ARC COMPASS sets direction for airlines' travel data

The company leads air carriers in a paperless, speedy and user-friendly direction.

by Michael Donovan

Over the past century, air travel has shrunk the planet, making the crossing of great distances a matter of hours rather than days, weeks or months.

Yet even as travel continued to grow more and more rapid, the travel industry remained wedded to paper tickets and traditional record-keeping. It was a marriage prompted by necessity: Computers and electronic data are, after all, far younger than airplanes or, for that matter, the travel agency industry—which was already a billion-dollar business 40 years ago, when air travel was a far smaller market and the dollar a far larger unit.

As recently as the mid-1990s, the ticketing industry and the travel agents who comprise much of it continued to print travel coupons, write sales reports by hand and send paper sales records to financial settlement companies for keypunch entry.

The process was time-consuming and carried plenty of potential for problems, fraud, lost information, data-entry errors and inefficient access to records.

But the industry would soon move along a new, increasingly electronic curve. The Air Traffic Conference Area Settlement Plan (1964) was originally an operational arm of the Air Transport Association (ATA), the trade association of the U.S. airline industry. In 1984, as one result of the decade-long deregulation of the airline industry, this rapidly growing financial clearinghouse service spun off from ATA to become the Airlines Reporting Corporation (ARC), an independent company. Since that time, the company has guided the industry into the digital age at a near-supersonic clip. After introducing electronic credit card billing (ECCB) in 1989, the company settled its first all-electronic ticket transaction just six years later.

In 1997, ARC introduced an all-electronic reporting system, and in 2001, it developed an electronic ticket retrieval and detail program.

Today ARC processes, reports and settles 150 million airline tickets, 90% of which are electronic, every year for flights serving the United States, Puerto Rico and the U.S. Virgin Islands. That's a lot of tickets and—just as crucially—a lot of information.

Getting its bearings
ARC first turned to Teradata in 2000. "We launched into data warehousing requiring multiple terabytes of storage on day one," recalls ARC's John Kyle. "Because of our ticketing volume, we were not able to ease into it. Teradata was the vendor that made us most comfortable that we could accomplish our business objectives under these conditions."

With a firm Teradata Warehouse foundation in place and guided by the mantra "Go electronic!" ARC approached the new millennium with the goal of transforming its growing abundance of information into industry knowledge. The company created ARC COMPASS in 2001 as a core business tool that would harness the resources and power of its Teradata Warehouse to provide the travel industry with both data retrieval and analytical services.

As Kyle, vice president of marketing and general manager of ARC's Data and Analytical Products division, explains, "Our services extend beyond ticket processing and settlement to a full range of analytical and historical reports aimed at providing the entire industry with the most accurate and thorough picture of itself and the trends that affect it. We provide the tools that let our customers turn information into the reports they need to be better able to do their business."

Because many aspects of the travel industry are seasonal, and because the industry as a whole is affected by factors such as fluctuating fuel costs and intense fare competition, any historical context is crucial to deriving an accurate sense of industry trends both over time and as a result of outside factors.

"The vision behind ARC COMPASS was to build a Teradata Warehouse and use it to capture the information associated with ticket transactions and maintain that information for 39 months," Kyle says. "Now carriers and travel agents are able to have access, 24/7, to electronic retrieval of ticketing records, which is nothing short of a revolution."

The revolution extends much further than just facilitating online access to tickets. "A lot of what we've set out to do here flows from the years of experience my colleagues have as leaders in the air travel industry," Kyle notes. "That leadership led ARC not only to guide the industry to electronic ticket processing but to use the process of going electronic as an opportunity to root out all sources of potential error and to raise the accuracy and integrity level of information even as we speeded up the operations involved in settling tickets."

As a result, ARC can regularly update information derived from the tens of thousands of tickets processed every day, providing daily details that are vital in an industry where ticket prices can change in an instant.

"Our warehouse is loaded nightly," Kyle says, "which provides a current picture of how trends and patterns are shaping the industry."

And it is an industry-wide approach that guides the operation. The advantage of its central clearinghouse origins remains intact as ARC COMPASS draws from large-scale, cross-industry data feeds to provide often unprecedented views of a complex, frequently volatile and constantly changing industry.

Vision—heading true north
"Most data warehouses are internally-focused, concentrating on sales, customer behavior, supply chain optimization and so on," Kyle notes. "Our vision was to provide that sort of power to customers outside our company, to give them the resources of a data warehouse with an unequalled store of industry data."

The vision has proved popular. "Our document retrieval service has more than 15,000 users among travel agents and air and rail carriers," Kyle says. "(They) have simple, powerful tools that let them log into the service over the Web and look up any ticket processed in the past 39 months."

Equally central to the vision for ARC COMPASS was unleashing the data warehouse's power as an analytical and reporting engine, bringing the products of that power to customers who might otherwise never have had access to such knowledge.

"We're constantly growing the data and analytical services we offer," Kyle says, "offering reports ranging from daily sales and tax summaries to origin and destination reports, agency performance summaries, carrier reports and more."

Agents and carriers are able to use the data warehouse to extract highly granular information—discovering, for example, the top 500 agencies offering travel to specific destinations in Mexico or determining the trend patterns agencies experience as a result of fare increases, special promotions or marketing efforts.

"This sort of knowledge would, at best, have been difficult for agencies to obtain independently and in some cases, impossible," states Kyle.

ARC is also using tools such as Teradata Warehouse Miner for fraud detection and prevention. "It helps us identify trends and patterns in the data that may be indicative of fraudulent ticketing activity," Kyle reports.

Mapping out a secure future
ARC's commitment to rooting out errors and reaching the highest level of data integrity extends to the security issues and concerns surrounding confidential information embedded with the flight-oriented data on every ticket.

"Confidentiality of sensitive industry information has always defined us as a company," Kyle says, "and the warehouse is no exception. We do not report any individual company financials to any other entity. We employ the best encryption and masking technologies. Because some of our customers have as their customers travelers from European Union nations, we are EU Safe Harbor compliant, letting us meet EU data privacy standards as well as U.S. standards."

There's more than European compliance in ARC's idea of the future.

"There's no doubt that we're eager to bring more of the world's ticketing into the operation and, with it, more of the world's ticketing information," Kyle explains. "The more data we have in the warehouse, the better and more accurate the picture of the worldwide travel industry we'll be able to provide."

And ARC will provide that data in new and innovative ways. "We're looking forward to further automation of our subscription and interaction activities," Kyle says. "We want to create an interface where clients can self-subscribe to the types of information, analytics and special reports that best suit their needs and businesses. Our goal is to put customers in control of the information they want and provide them with the knowledge they need."

The data warehouse itself will continue to evolve. Currently running a 10-node system supported by a full disaster recovery site at the Business Continuity Solution's Recovery Center at Teradata's San Diego facility, ARC's technology team is considering a transition to a dual-active operation. In that case, two sites will serve as data warehouses and as disaster recovery sites.

With so many innovations taking place in the decade since ARC completed its first all-electronic ticket transaction, can the coming years maintain the same pace of progress and change? Kyle has little doubt that they can—and will.

"Look at the leisure travel market alone," he says. "There's been an absolute revolution in the way people purchase tickets, plan travel and (develop) travel patterns. It is critical that our customers be able to analyze that information in as close to real-time as possible so that they can grow stronger in what are, frankly, challenging times for the travel industry."

On the horizon
"The airline and travel industries are clearly in transition," Kyle says, "and the more that ARC can do to improve the efficiency of ticketing transactions, as the information and data store for the industry, the more the industry itself is freed to focus on solving fuel pricing, cost and other problems."

It is clear that ARC is committed to the industry as a whole. And, of course, ARC will continue to grow its own business and the data warehouse's role in it.

As Kyle notes, "Our commitment to the industry is what lies behind the decision to launch ARC COMPASS in the first place—to take the same warehouse technology that enterprises use for internal purposes and to build a strong, revenue-generating business providing document retrieval and a wide range of information and reports to our customers."

The vision is clearly centered on ARC's commitment to using technology, in concert with carefully refined business rules, to achieve three guiding principles.

"First, we provide the ticketing industry with the world's best settlement engine," Kyle says. "Next, we maintain the information from those settlements accurately and thoroughly, letting us serve as the travel industry's data store. And by applying analytics and data services and making reports from those services available, we become nothing less than the premier provider of knowledge and insight to the travel industry."

Obviously, ARC has traveled expansive, shifting terrain. And its journey, like that of the industry it serves, is far from over. T

Behind the solution

Teradata Warehouse powered by: Teradata Database V2R5.1, 10-node 5350 NCR Server Storage: Total Disk: 25.5TB User Disk: 8TB Operating System: UNIX MP-RAS Teradata Utilities: Teradata Utility Pak Tools/Apps.: Teradata Warehouse Miner (Teradata Profiler) and products from Ab Initio

Journalist Michael Donovan has served as a consultant to various companies engaged with information technology and communications.