Connected Strategy and the Future of JAL
(English version)

In Professor Siggelkow’s previous lecture, he noted that connected strategies can reshape industries. The airline industry is now facing a similar period of structural change. Historically, air travel was based on physical movement, but companies such as Zoom and Meta are attempting to substitute parts of physical travel with digital experiences. At the same time, companies such as Toyota and Tesla, together with emerging mobility players, are exploring flying mobility and drones that may shift the industry from the traditional “airport-to-airport” model toward a more point-to-point reality.

JAL does not view these changes only as threats. Rather, it sees them as an opportunity to understand customer needs more deeply and evolve. The purpose of the discussion was to explore how a traditional physical airline can become a winner in the future of connection.

Professor Siggelkow observed that strategy is not only about deciding what to do, but also about deciding what not to do. He noted that Japanese companies often find it difficult to say “no.” They tend to want to serve everyone, everywhere, with every service. However, it is extremely difficult to become world-class for every customer segment.

He also pointed out that many Japanese companies remain product-driven or technology-driven rather than truly customer-driven. They may create impressive technologies, but those technologies can sometimes be too complex or difficult for customers to understand and adopt.

JAL’s analysis shows that Japanese and overseas customers value different aspects of the travel experience. Japanese customers tend to place greater importance on human elements, such as cabin crew service and personal hospitality. Overseas customers, by contrast, tend to place greater importance on digital convenience, such as online check-in and self-service processes. Even in the same airport or on the same flight, customers may perceive value differently.

Professor Siggelkow found the distinction interesting, but emphasized that what customers say they want is not always the same as what they are willing to pay for. For example, customers may say they want an in-flight magazine, but many may not be willing to pay an additional five dollars for it. The key managerial question is how to balance efficiency with customer value.

Professor Siggelkow referred to Qantas as an interesting example of how airline miles can be treated not merely as “airline miles,” but more like a broader currency. When miles can be earned and used beyond airline tickets, the airline can become embedded in customers’ daily lives.

He noted that the average customer may fly only two or three times a year. Therefore, the strategic question is how JAL can increase daily touchpoints and make the mileage ecosystem part of customers’ everyday routines.

JAL is also expanding mileage touchpoints through group businesses such as LCC operations, e-commerce, and related services. However, Japan has long had a culture in which many services were bundled into the ticket price. The shift toward LCC models and paid ancillary services represents a major cultural and business-model transition in Japan.

JAL raised three key questions regarding AI:

• How can JAL serve a global and multi-layered customer base while its physical assets remain limited?
• How can AI be used to create new value and differentiation, not only productivity improvements?
• In Japan, where omotenashi and human hospitality are highly valued, where should JAL preserve the human touch and how should it integrate that touch with AI?

Professor Siggelkow emphasized the importance of asking about the “cost of an error.” A mistake in fuel calculation would be critical, while a mistake in call-center summarization may be relatively minor. Therefore, the degree to which AI can be trusted or delegated should depend on the impact of potential errors.

He also stressed the need to separate internal operational efficiency from customer experience enhancement. AI can be used to improve internal productivity, but the more strategic question is how AI can enhance customer experience while reinforcing JAL’s differentiation.

JAL raised the concern that AI and digital technologies may standardize service across airlines. If every airline provides the same automated service, it may become difficult to differentiate. JAL therefore wants to preserve and strengthen its differentiation through human warmth, personal service, and hospitality.

Professor Siggelkow suggested distinguishing between two types of customer experience:

• Normal experience: the ordinary flow of booking, boarding, flying, and arriving when everything works smoothly.
• Irregular experience: situations such as delays, cancellations, missed connections, or rebooking needs.

He argued that true differentiation often appears in irregular situations. Many airlines effectively tell customers to solve the problem themselves, either by waiting in a long line or using a website that may not work well. If JAL can support customers quickly and empathetically in these moments, customers may be willing to pay a premium because they trust that JAL will take care of them when something goes wrong.

AI can support this by instantly suggesting alternative flights, identifying customer priorities, and helping ground staff find solutions more quickly. Human staff, meanwhile, provide empathy, reassurance, judgment, and emotional support. This combination is the essence of “Human × Digital.”

Professor Siggelkow noted that airlines could make better use of customer data in premium cabins. For example, for the 30 or so first-class passengers who pay a significant premium, flight attendants often know only the passenger’s name and perhaps the pre-ordered meal. However, airlines may be able to use information such as past travel history, preferences, and customer status to provide more personalized service.

This does not necessarily need to apply to every passenger on the aircraft. Rather, premium segments may be an appropriate place to use data-enabled human service to create differentiated value.

Professor Siggelkow noted that a common source of resistance to AI is the fear that employees are being asked to train their own replacements. If AI is framed as a replacement tool, employees may naturally resist adoption.

Therefore, it is important to position AI as a tool for capability expansion rather than substitution. AI should reduce tedious or low-value tasks, help employees become more productive, and allow them to focus on higher-value human work such as empathy, judgment, and customer interaction. The key is whether AI can be perceived as a partner rather than a threat.

Professor Siggelkow concluded that there is no single best solution for all customers. Different brands and segments should make different strategic choices. For example, LCC brands may pursue extensive automation, while premium brands may strengthen human service and personal attention.

Although AI is evolving rapidly, companies should not wait until AI becomes perfect. Instead, they should experiment on a small scale, learn from those experiments, and carefully choose where and how to apply AI. High-value customer segments may not be the best place to begin experimentation; lower-risk contexts may provide better learning opportunities.