Alan Joyce charts hi-tech course

Two decades after its painful death, the Compass name has come to life again in Australian aviation.

Two decades after its painful death, the Compass name has come to life again in Australian aviation, deep in the bowels of Qantas headquarters at Mascot. And it is being rolled out across the airline’s entire domestic network.

Compass is the name Qantas has given to its new automated delay recovery system, which uses algorithms and data analytics to find solutions, in a matter of seconds, to delays caused by air traffic control flow management or bad weather.

Compass Airlines, the nation’s first low-cost airline, operated in Australia for two brief periods in the early 1990s before it crashed and burned twice.

Its rebirth as a computer program is yet another product of the 40-strong team of actuaries and mathematicians that have been working with Qantas since it took a controlling stake in analytics and actuarial consulting business ­Taylor Fry 18 months ago.

Qantas boss Alan Joyce sees Compass as an example of the way Qantas can use big data and the internet of things to enhance what it does in its core operations.

One of the first big tests of Compass was the extreme weather conditions on Australia’s east coast late last month when Qantas says it outperformed its competitors and was more ­efficient at ­recovering its operations.

Compass will be extended to consumers when the airline rolls out free in-flight Wi-Fi on about 100 domestic aircraft, under a partnership with global broadband services provider ViaSat that will tap into the National Broadband Network. For example, it will be used to send passengers updated itineraries in-flight in the event of delays, allowing them to make arrangements ahead of time.

Data analytics is also being used in the group’s revenue management operations, as well as its frequent flyer business through things like Red Planet, a media and marketing services business that leverages the airline’s understanding of consumer behaviour and melds it with data analytics.

It is all part of Joyce’s vision to use technology to drive the next stage of the airline’s evolution after the brutal cost cutting and fleet writedowns of recent years.

That those hard decisions have paid handsome dividends was plain for all to see in yesterday’s booming annual results. And the sustainability of the Qantas business platform was confirmed by the decision to resume putting cash back in shareholders’ hands.

But having just celebrated his 50th birthday, Joyce is all too aware of how quickly an airline business can turn. International yields are under pressure from capacity growth, the oil price is ticking higher and domestic demand is still weak in the resources sector.

Importantly, 75 per cent of the airline’s earnings now come from the domestic and frequent flyer businesses, which are less volatile than the international operation.

But again the key to the future will be technology: for example, flying Boeing 787 aircraft with better fuel efficiency and longer range, flown by pilots who will deliver a 30 per cent saving in productivity. Or A320 Neo aircraft with a 14 per cent fuel benefit over the present A320 fleet.

Joyce, who graduated with honours from the Dublin Institute of Technology with a bachelor of science degree in applied science, majoring in physics and mathematics, is no stranger to the power of numbers.

He will now be banking on a new hi-tech Qantas delivering shareholders less volatile and more sustainable returns during the remainder of his tenure.