The Olympics, large conferences, major sporting games, meetings, festivals, and other events provide tremendous opportunities for an airline’s group business. These can be all the more profitable for an airline with the right tools, processes, and strategy to capitalize on them. Japan Airlines (JAL) is one such carrier, and this conversation with JAL’s Masanori Miyajima reveals how they positioned themselves to grow their groups business and to be more competitive in the marketplace.
About the Speakers
Genevieve Todd, Product Marketing Manager at PROS, creates messaging and content for PROS travel industry and solutions. She has a keen editorial eye and enjoys bringing a creative flair to the travel solution content creation work.
Masanori Miyajima's nearly 32-year career at Japan Airlines has encompassed roles from IT planning, network planning, human resources management, corporate planning and most recently revenue and profit management, route marketing.
Genevieve Todd: Hello, everyone, and thanks for taking the time to join us today. I'm Genevieve Todd, a Product Marketing Manager here at PROS, and today I'm pleased to speak with Masanori Miyajima, Vice President of Japan Airlines. Hello, Miyajima and welcome to Outperform 2021. Miyajima has been with JAL since 1990, and in 2018 we were fortunate enough to have him at Outperform, where he spoke about JALs revenue management strategy. Today, I like to focus on group sales, more specifically JAL’s success with GSO, our Group Sales Optimizer. But first, Miyajima, could you take a few moments and tell us a little bit about yourself?...
Masanori Miyajima: Yeah hello, Genevieve. Yes before Covid, I used to look forward to participating in this event in the Moldavia. But after covid, it became a virtual event. And while I think this is a new normal, I'll also be a little bit sad personally, even if I put in the needs of the Industrial side. Anyway, thank you very much for giving me this opportunity to speak at Outperform. Thank you.
Genevieve Todd: Thank you for being here. So in 2020 JAL rolled GSO GSO out to all of its travel agents and sales office users in the domestic market. Thanks to the rigorous testing and planning, the group sales and booking process for GSO was rolled out without any issues. Long term JAL looks to accelerate group bookings, and they also look forward to enjoying the benefits of more seamless business operations, as well as more efficient use of resources, which is of course, critical in the current industry environment. So first, let's go back and take a look at how this all started. Groups have always been an important part of JAL’s business strategy, but at some point the airline realized that there was room for growth in terms of group handling. So can you tell us a little bit about the challenges that JAL faced before GSO?
Masanori Miyajima: Yeah, sure. Yes before I took our challenges, we are facing before GSO, so let me first explain our situation as a background to the challenges there are in practice. 10 years ago was in a state of Galapagos having Ebola on our own, not only in the group process. In that context, the group process was completely manual work. There was a culture that affirmed the work that could be left to machines was being done manually, and a huge amount of human resources were being invested in that work. In an effort to try and change the situation, we implemented GRS in 2017, which allowed us to automate quotations. But the creation and communication with travel agencies was still done through human intervention. As a result, the department resources were greatly streamlined, but the sales department required more human resources than before GRS implementation. This is like whack-a-mole, and I ready to hit this newly emerged mole. The other was that we needed to redesign overall group process to adjust the balance between RM and the service in the sense. The main objective to implement GSO was to address legacy issues rather than the digitization needs.
Genevieve Todd: So these challenges must have affected more teams than just Revenue Management. For example, can you tell me, could you compare how the Revenue Management and the pricing teams communicated before and after GSO implementation?
Masanori Miyajima: We have been using GRMS before GSO, so the interactions between the pricing and our team should have been automated when this was implemented in 2017. Therefore, the interactions between the pricing and the RM team should have remained basically the same before and after years of implementation. But but in fact, it did change, with GRMS. The communication with travel agencies was offline, so our members did not pay so much attention to the frictionless, and they requested pricing members to visually check knocking request from group desks as long as afforded the addition. The RM members who are not willing to leave the final decision on whether or not to accept the knocking request during the busy season, especially the busy season, to pricing members. However, with GSO at least the automatic response to travel agencies is prevented by the otukpo inhibitor, which is one of the GSO features that code responses automatically be turned to the travel agencies. This is the fundamental nature of GSO, so RM members are now aware, are fully aware of the advantage of frictionless and no longer demanded the excessive visual checks from pricing members. Furthermore, with GSO, communication between the travel agencies in the pricing team is now online. The feature has greatly streamlined the work of group this in the middle of travel agencies in the passing game. As a result, in terms of the head count of our group desk, the model there are 50 stars. More than 50 stars were allocated. Before GSO and we managed to reduce the resource by half after GSO.
Genevieve Todd: Wow, it sounds like quite a victory. What results have you seen in terms of revenue and win rates and other benefits since GSO implementation?
Masanori Miyajima: That is a very difficult question to answer, you know, so we introduced the GSO last year, which coincides exactly with when demand funding started in COVID 19. Therefore, I think it does not make sense to make quantitative comparisons between before and after GSO implementation with the district raising revenues. However, we have received favorable positive feedback from agencies that are purchasing easy and quick, and I believe this will help stimulate demand during the demand recovery period after COVID.
Genevieve Todd: So you've probably noticed that digital strategy is a theme that winds throughout this conference. That being said, what can you tell us about JAL’s digital commerce strategy and how does GSO fit into that strategy?
Masanori Miyajima: OK so I see in all aspects of life, not just in the airline industry, consistently that before and after covid, there is digital commerce strategies to leverage digital technology at every touchpoint of with customers to tailor services to their needs. In other words, the I'm sorry that in order to achieve this there, as I mentioned earlier, that we need to change the deeply rooted culture in the sales department that affirms the use of buyers that to perform tasks that can be left to machines and an investment of enormous human resources in these tasks. As I mentioned earlier, the main purpose of introducing the GSO was to address legacy issues rather than digitization is. But but I believe that different pricing used by GSO will become a part of JAL’s digital commerce strategy. I didn't expect that, but we finally captured a nice more this time.
Genevieve Todd: Yes, and it sounds like you have some of the tools you need for digital transformation as well. So we know firsthand that you lead a very talented and dedicated team. So how have you and your team put GSO to work for you? In other words, how has GSO helped position JAL to grow your group's business and be even more competitive in the marketplace?
So all the GSO uses dynamic pricing. The GSO current to come up with dynamic pricing may not be the only one. And so we'd like to be feedback, provide feedback to the cross on the reasonableness of the prices. And I hope that PROS will further refine the algorithm. More specifically, for instance, the spring to something like the. The willingness to pay tribute on the business. As I discussed in the individual passenger business, I think there is also a theme of the merchandising in the group business. In the past that the group business was the domain business in the Japanese market. But the good business in Japan is not necessarily on the lights, but in such a situation, I think is the most crucial for every stakeholder to reduce the friction as much as possible from any touchpoint in order to boost both inbound and outbound group demand, rather than to see the way that our competiveness has improved compared to our competitors or not. So I think these are strategy, not something that can be built in an instant, that it is something that can be built gradually, that the idea of the back casting. In that sense, we obtained an important piece GSO. In the future would like to further enhance GSO to boost our group business with help from PROS.
Genevieve Todd: Well, we look forward to continuing to work together with JAL. Miyajima, thank you so much for your insight today and for joining us at Outperform 2021.