Asia's Top Performer
Japan Airlines Increased Corporate Business Significantly By Using PRISM Technology
When examining its corporate client base, Japan Airlines realized it only had a very small share of the Asia business-traveler market (excluding Japan). Its goal, utilizing PRISM technology, was to increase its business by a small percentage, which would result in additional millions in annual revenue.
Since its founding in 1951, Japan Airlines has been a solid performer, first in the Asia/Pacific region and eventually beyond, introducing scheduled international service, Tokyo-Honolulu-San Francisco, in 1954. By February 1970, the Tokyo-based company was listed on the first section of the Tokyo, Osaka and Nagoya stock exchanges, and 13 years later was ranked No. 1 in Asia by IATA in terms of passenger and cargo transportation, a position the Japanese-flag carrier held for the next five years.
To further strengthen its global reach, Japan Airlines joined the oneworld alliance in 2007. After a few financially turbulent years and a subsequent 2010 reorganization, the carrier has emerged stronger than ever.
In 2013, it was the world’s 15th and Asia/Pacific’s fifth-largest carrier in terms of operating revenue and the third largest in net profit. Last year, the airline was recognized by Aviation Week as the top-performing large carrier in the Asia/Pacific region.
Despite a solid performance overall, the carrier faced several key challenges and discovered areas for improvement, specifically its inability to fully track the effectiveness and profitability of certain aspects of its operations, among them its corporate business.
“You can’t improve your company’s performance unless you’re able to measure it,” explained Steve Smith, vice president of global sales for Japan Airlines. “And we weren’t able to do that accurately prior to 2006. We also didn’t have a way to track market-share opportunities or measure the performance of our corporate accounts in terms of overall revenue for the airline.”
21 Percent Increase In Corporate Business
Japan Airlines realized an increase in its corporate traveler segment from 12 percent of total revenues to 33 percent since implementing PRISM in 2007. According to the airline, nearly one out of every three revenue dollars is corporate driven.
Faced with the need to analyze and enhance the value of Japan Airlines’ corporate business, the airline implemented the PRISM solution for its U.S. operations in 2007. Now part of Sabre Airline Solutions®, PRISM’s airline corporate-customer-management solutions feature advanced decision support, contracting, reporting and customer-relationship management.
The implementation was not without challenges, as Japan Airlines’ headquarters would have been more comfortable had the solution used the yen as the financial denominator. Initially, however, this was not an option.
“Our senior management team agreed to let us use PRISM on an experimental basis in U.S. point-of-sale markets,” explained Smith. “We believed that if we had the opportunity to use PRISM for a couple of years, we would be able to provide positive results.
“After the initial period, the organization felt that it was a very useful tool. In addition, the PRISM team got together and really worked to convert the solution into a Japanese format. And that strong effort by PRISM was instrumental in helping us expand beyond the United States.”
Moving forward, however, there were some slight obstacles that the airline had to overcome. In particular, some corporations needed to understand how and why providing data was important to receiving an airline deal. But soon, Japan Airlines found that it was able to forge trusting relationships based on the benefits it would bring to its corporate customers, as well as the airline.
“Eventually, we began to see companies begin to understand the importance of measuring performance, and we benefited from the reporting from the PRISM product, which helped improve our results. It created a win-win situation for everyone,” Smith said.
By using PRISM’s capabilities, Japan Airlines was able to immediately isolate each of its corporate accounts and determine how it was performing.
“We found that in some cases where we thought a corporate customer was doing particularly well with us, its market share actually did not reflect that,” Smith said. “We also found other companies that were doing very well, and we continued to build upon that.”
Serving Additional Destinations
Japan Airlines was able to expand its network to include service to and from Boston, Massachusets, as well as San Diego, California, upon using PRISM’s reporting capabilities to evaluate individual flight segments, isolate key city pairs and place them in particular point-of-sale markets for the airline’s U.S. corporate customers.
Since Japan Airlines began using PRISM in 2007, its corporate business share has grown significantly.
“We know that the corporate business is very important to our overall success,” Smith said. “And we would have never been able to measure that without PRISM. Its data, reliability, timeliness and ability to identify underperforming markets are key components in helping Japan Airlines perform better.”
Alliances also play an integral role in Japan Airlines’ growth strategy. With PRISM, the airline can isolate each of its partnerships and identify its market share in individual city pairs and regions, as well as explore opportunities in other markets.
For Japan Airlines, PRISM’s flexibility is among its strongest capabilities as a measurement and performance tool.
“We have the ability to ‘slice and dice’ the data in any number of different ways,” he explained. “We only use a small number of the 400 or 500 reports available, but we know that if a particular situation arises, we have the flexibility to make the necessary changes to our reports. We have also been able to make changes that provide opportunities for us to help individual corporate customers.”
Although Japan Airlines primarily utilizes PRISM’s report capabilities at this time, it may consider other functionality in the future.
“I think we still have an opportunity to grow our relationship with Sabre Airline Solutions and our utilization of PRISM,” Smith said. “PRISM has other great tools that we’re not part of at this time, and our team is becoming more and more confident using PRISM.
“PRISM has helped our people become more productive, and we’ve been able to measure our performance. I look for us to have a longer and stronger relationship with PRISM and Sabre Airline Solutions.”