This article and the accompanying slide deck are part of a series exploring how companies in specific industries can adopt the mindset, expertise, and ambition required to win in an AI-first world.
The airline industry is no stranger to turbulence. Margins have always been thin. Demand has returned, but labor shortages strain operations, while global supply chain disruptions delay maintenance and limit fleet capacity. At the same time, passengers want more seamless digitally enabled experiences.
AI can help airlines both address these immediate challenges and navigate the future. The AI-first airline—with AI at the core of how the organization operates and serves customers—is quickly coming into view.
These airlines will integrate commercial and operational activities for the benefit of customers, employees, and investors. By combining those activities, airlines can personalize customer journeys while running smarter, more efficient operations. The result will be higher customer satisfaction, stronger profitability, greater resilience, and more effective and engaged teams.
The AI-first airline will integrate commercial and operational activities for the benefit of customers, employees, and investors.
The AI Opportunity
Airlines are grounded in both the physical and the digital world. Their aircraft, gate operations, and maintenance facilities are the visible face of the industry, while their network optimization, dynamic pricing, resource planning, and customer experience capabilities are powered by the invisible forces of digital technology.
In recent years, AI systems and tools have advanced tremendously. Agentic systems are now capable of acting autonomously across complex workflows. GenAI is capable of reshaping booking, pricing, and disruption recovery, while leading carriers are using traditional AI routinely in maintenance and network planning.
The airline industry is in the middle of the pack in its AI maturity—not as advanced as software companies and banks but further along than heavy machinery makers, for example. In the past year, airlines have increased their AI maturity from slightly below average to average in comparison with other industries, according to BCG’s Build for the Future study. Only one of 36 airlines met the highest criteria of being “AI-future built.”
This is a missed opportunity for the other 35. By 2030, AI leaders in the airline industry will enjoy operating margins five to six points higher than their peers.
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The AI-First Framework: Deploy, Reshape, Invent
The flight plan forward follows the same three-phase framework that has proven effective in other industries: deploy, reshape, and invent.
Deploy focuses on embedding AI into day-to-day operations. These are relatively straightforward applications of off-the-shelf AI tools. This phase can deliver meaningful productivity gains, build confidence, and set the stage for greater impact.
Reshape focuses on revising workflows and processes to improve airline economics and the passenger experience. AI agents can play a pivotal role in this phase by assisting in two areas in particular:
- Network and Revenue Management. AI-powered simulations allow airlines to predict market share, test alternative schedules, and adjust pricing dynamically.
- Maintenance and Ground Operations. Predictive models built on sensor data can identify issues before they cause disruptions.
Reshape initiatives typically deliver 20% to 40% efficiency improvements across operations while boosting customer satisfaction.
Invent allows airlines to create innovative business models across silos. By integrating data and decisions across commercial, operational, and support functions, airlines can boost performance. Here are two examples:
- In partnership with BCG, KLM Royal Dutch Airlines has developed an operations control AI platform that integrates rules, maintenance schedules, airport data, crew rosters, passenger behavior, and predicted aircraft arrivals. The platform optimizes fleet and tail assignments, improving fuel burn, on-time performance, customer value, and service reliability even during heavy disruptions.
- In personalized retailing, some carriers are piloting AI agents that offer trip planning, personalized bundles, and mid-journey support. These tools create bespoke travel experiences and spur growth.
Becoming an AI-first airline isn’t just about deploying smart tools; it requires transformation that’s carried out in stages. The executive team will need to set a clear AI agenda, agreeing on high-ROI opportunities to pursue. The company will need to replace decades-old IT with modular, integrated platforms that allow data to flow seamlessly.
The human element still matters. Airlines must break down silos, reshape roles, and introduce new ways of working so that AI is embedded across the organization rather than bolted on at the edges.
The human element still matters. Airlines must introduce new ways of working so that AI is embedded across the organization rather than bolted on at the edges.
Getting Started: Six Steps for Airline Executives
The AI-first airline may seem distant, but executives can bring it into view faster by taking six concrete steps:
Manage the transition to AI first from the top. Align governance, resourcing, and business and technology efforts to a few game-changing AI use cases while preserving room for bottom-up innovation and experimentation.
Refocus strategic priorities. Define what you’re solving for, which competitive advantages to strengthen, and which customer and partner shifts to anticipate. Revisit your priorities twice a year.
Adapt the tech strategy for agility. Maintain flexibility in choosing tech partners, and decouple AI efforts from existing backbone modernization.
Set up a focused AI-delivery office. Anchor the program in a central team that’s connected to the transformation and finance functions to ensure effectiveness and accountability.
Anticipate medium-term impacts. Plan for changes in organizational design, talent strategy, and competitive dynamics as AI scales.
Drive cultural change. Shape new behaviors through leadership modeling and broad-based upskilling.
Airlines that move decisively to become AI first will set the pace for the industry, with new standards for performance, innovation, and customer experience.
