The project of reform and revival that saved JAL

A major turning point came for JAL in 2010 when the airline filed for bankruptcy and subsequently announced a proposed rehabilitation plan that included a much needed IT system renewal.

Since 1967, JAL used the JALCOM reservation and ticketing system, built using Assembler on an IBM mainframe. But these ran on extremely old operating systems, so it was only a matter of time before support for them would end. JAL’s outdated system eventually became a hindrance by 2000, so a review team conducted product research into passenger service systems (PSS) from major vendors. The issue, however, was postponed in the face of higher priority issues such as the airline’s merger with Japan Air System in 2002 and its deteriorating financial situation. Ironically, when the company filed for bankruptcy, delays in IT investments drove up costs even further, so an urgent fix to the whole system was prioritized to get a handle on the situation.

This is when the Sakura Project began. In April 2011, the passenger system promotion department (PSPD), initially consisting of 10 people, was established under the Route Management Headquarters, where Hitoshi Sugihara, now the head of JAL’s digital CX planning department, was a member and an instrumental part of the Sakura Project.

“We struggled with our system becoming spaghetti-like due to repeated modifications, making it difficult to implement new ones or market-related measures,” says Sugihara. “The turning point was when British Airways sold their systems subsidiary to Amadeus, after we purchased British Airways’ software and modified it ourselves. As a result, we no longer had backing from BA, and it became difficult for us to maintain the system on our own.”

The following year, the IT planning department within corporate planning headquarters was upgraded to the IT planning headquarters, and a system was established in which the PSPD assessed projects from an operational perspective while IT planning looked at approaches from a technical perspective.

Cloud service decisions

The basic policy for the new system was to use cloud services with a proven track record servicing overseas airlines, focusing on international flight reservations and ticketing.

“When we researched solutions in 2011, there was no thought of migrating to the cloud,” says Sugihara. “At the time, whether it was Amadeus or any other vendor, we were using a secure, intuitive, and low-cost SaaS format, where the system was connected to a network in a data center somewhere overseas.”

In early 2012, they submitted an RFP to IT vendors, and ultimately chose Amadeus’ cloud service Altea after evaluating its effectiveness across other airlines.

“We had knowledge of British Airways’ system structure, and Altea’s was compatible with us,” says Sugihara. “Amadeus was already a leader in the industry and had expanded globally in various ways. We wanted to respond flexibly to the uniqueness of the Japanese market while firmly establishing ourselves as a global standard, so we chose Amadeus, which experienced numerous transitions, established its own methods, and had solid documentation.”

There are about 100 types of passenger-related peripheral systems connected to JALCOM, of which about 70 are connected to Altea. A relay system called the Passenger SOA Platform, for instance, was built to convert the data formats of these systems into Altea format.

Because Altea can incorporate the unique specifications of the host company, JAL considered customizing it within itself. But the more they tried to estimate the labor hours, the more requirements emerged. As a result, Amadeus refused, saying they wouldn’t take on projects that exceed the initial estimate.

Mobilizing the Sakura Project

Sakura Project director Yoshiharu Ueki appointed Nishihata Tomohiro as head of the PSS revamp in 2014 and was in charge of JALCOM maintenance. As the former lead of the web sales department, he was familiar with both back- and front-end systems, so he was ideally situated to develop a new system.

Tomohiro then succeeded Ueki as head of the Sakura Project and transferred up to 50 project members from IT planning to the PSPD. The team then consisted of around 100 people, but expanded to over 300 at its peak, with around 200 from JAL Infotec, the IT planning department, airport subsidiary JAL Sky, and call center subsidiary JAL Navia. And another 150 from partner companies like Nomura Research Institute (NRI), later taken over by IBM Japan, and Sigmaxyz.

“Initially, the company’s reorganization plan identified outdated IT in several areas, so the IT planning department requested NRI’s assistance in reviewing the entire system,” adds Sugihara. “One aspect of the plan was updating the PSS, so NRI came in at the initial stage, but when it came time to put the plan into action, IBM Japan, who had worked on the POS system in the past, began to get more involved.”

IBM took charge of upgrading JALCOM’s peripheral systems and managing the project, and Sigmaxyz was in charge of project management to customize Altea. But as the introduction of PSS progressed, a problem emerged regarding the complicated fare system for domestic flights, which is divided into discounts and reservation protocol not in sync with the global standard.

“We struggled with how to incorporate the unique characteristics of domestic flights into Altea,” says Sugihara. “So we came up with a system called Class J, which allows passengers to upgrade at the airport. In the end, we considered what we could do on top of Amadeus’ solutions, and were able to roll out some clever ideas.”

A cultural shift

Taking on challenges without fear of failure helped develop a new mindset at JAL. As the project neared its final stages, a major issue was transferring passenger name records (PNR) and e-ticket data. At the time, JALCOM had approximately 4.5 million PNRs and about 9 million e-tickets. To execute this shift to Altea without errors, data transfer system JAMP was used to collect data from JALCOM and integrate it with email addresses collected from another database into a single one for easier handling.

Data migration began two months prior to the actual launch, and all data accumulated in JAMP, excluding canceled flights and those following the launch date, were sent to Altea. After that, the differences were passed on in two or three installments, and 99% of the data to be migrated was pre-migrated to Altea.

Toward the end of 2017, the existing system was shut down and the switchover work was successfully carried out.

“How to transfer around 13 million pieces of data to the new system was extremely important, and Amadeus was transferring data about three days before,” says Sugihara. “But we thought this was too risky, so we asked Amadeus to perform a mock test under similar conditions, which we called a pre-production variation, and we’ve included this in subsequent transfer projects.”

Widespread operational training

In order to continue utilizing the new system, it’s still necessary to educate users on how to use it and the risks involved. At JAL, approximately 10,000 employees use Altea for reservations, ticketing, check-in, and other tasks. Since it wasn’t possible to train everyone at once, a provisional manual was created, and that function has grown over the years from a team of 12 to about 500 on-site training leaders from airports and call centers who gathered at JAL headquarters for 10-day training sessions.

“When we gave the training to the people currently working on the job, there were some who always worked on domestic routes, and some who always worked on international routes,” says Sugihara. “There’s a gap between them, and at the initial stage, staff expressed concerns about it. But we had thorough discussions with the people in charge and brought them closer to the global standard.”

At this time, they made every effort to eliminate functional improvements no one would use and functions no one found useful, and a year after the PSS went live on international routes, a customized PSS for domestic flights was also launched after much effort at domestic airports.

“Airlines that have traditionally focused on operations often have a tendency to adopt a defensive approach,” he says. “But by taking on challenges without fear of failure, I think they were able to develop a mindset that allows them to survive in a tough competitive environment.”

As a result, other Japanese companies similar to JAL are rapidly upgrading their black-boxed legacy systems.

“The Sakura Project is a representative example of a large-scale project that adopted the fit-to-standard approach to bring operations into compliance with global standards,” says Daisuke Nishimura, president of DNTI, which provides digital transformation support based on the JAL example. “Conventional large-scale projects are developed using the waterfall methodology, but the only times users will actually use the system are at the requirements definition and acceptance stages. With waterfall, the distance between the users and the system is too far, and the requirements definition is insufficient at the acceptance stage, making it impossible to sort out user requests, resulting in a huge system. I think that JAL’s fit-to-standard development, with everyone’s participation, was an effective challenge for solving such problems.”