If you think the global airline industry is impervious to change but in need of major disruption, you’re not alone. That’s why Skift and the Accenture Amadeus Alliance launched their first Air Pitch Startup Competition to highlight three companies that are bringing innovation to the sector.
At Skift Forum Europe this year, the Accenture Amadeus Alliance put out an open call to startups. Together with Skift, the Alliance was looking for creative solutions to intractable airline industry problems, involving not just ticket sales and distribution but also the in-flight experience and operational efficiency. After a month-long vetting process, three finalists were chosen to present their ideas to kick off the Skift Global Forum 2018, held in New York City this September.
“We’re looking for startups in the airline sector that are innovating, providing services to airlines,” said Skift founder Rafat Ali, in his introductory remarks for the finals.
The competition had over 50 startups apply. In the final round of the competition the startups Mekl.io, Volantio, and Wonder each gave five-minute pitches to — and fielded tough questions from — a panel of airline-industry executives as well as experts from the Accenture Amadeus Alliance in front of a crowd of 400-plus travel insiders. Skift’s travel tech editor, Sean O’Neill moderated the evening, held in the 36th-floor Mandarin Ballroom of the Mandarin Oriental, New York.
In the end, Volantio triumphed. The company, which uses software to help airlines like Qantas and Volaris maximize revenues and minimize unsold seats, secured an invitation to the Accenture Amadeus Alliance Innovation Center in Dublin, where founders Azim Barodawala and Fenn Bailey will participate in a five-day design sprint so that they can and map their idea to an actual client issue, in order to generate market traction. The team also won $5,000 in prize money, a one-year subscription to Skift Research Reports, an airfare for two to Dublin, and two four-night hotel stays in the city for the duration of the residency.
“We were ecstatic,” said Barodawala. “Not just because it was cool to win but because it’d be exciting and transformational for the company.”
The two runners up were Mekl.io, an app that lets airlines offer customers customize offers, and Wonder, which simplifies the process of paying claims and issuing vouchers. (Find more on all three of the companies’ pitches below.)
The panel of judges included Guido Haarmann, managing director airlines, Central Europe, Amadeus; Steve Ferneyhough, managing director, global lead, travel industry, Accenture; and Carolyn Kremins, president, Skift. The other judges for the evening were Aris Kamvysis of Aegean Airlines, John Gustafson of American Airlines, Tristan Thomas of Etihad Airways, and Gudmundur Gudnason of Icelandair.
In determining a winner, the panel considered each company’s potential impact on four core pillars of need in the aviation sector: next generation retail, exceptional travel experiences, rethinking airline operations, and reinventing the airline industry.
During his pitch, Barodawala specifically mentioned how his company’s solving challenges in each of the four core pillars. One of his most compelling arguments was a real-world example of how Volantio improves customer service not just for passengers but also airline employees.
“This is actual feedback from Charity Crossett in Boise, Idaho,” Barodawala said, while showing a slide with her photo. Crossett, a customer service rep for Alaska Airlines, handles all sorts of customer service issues with the help of Volantio, with which Alaska has recently partnered. The software, according to Crossett, makes quick work of rebookings that are necessary when her airline has irregular operations caused by weather delays or other challenges like a last-minute swap of aircraft. Instead of dealing with irate passengers, Crossett is now seeing volunteers stand up and proactively manage their reservations, all thanks to Volantio’s solutions. That real-world example really resonated with judges like Haarmann, of Amadeus.
“We’re in the middle of a revolution: the airlines are restructuring their business in the digital world in a way they’ve never done before,” Haarmann said. “This competition is about getting fresh and disruptive ideas into this ecosystem and learning from other industries, whether that’s consumer, retail, automotive, or even from people who aren’t connected to the industry at all.”
In determining the winner, judges ranked each of the three finalists on a scale of one to 10 for each of seven metrics, including “relevance of business model,” “credible USP,” and “would I invest?” Volantio garnered a total of 379 points out of a possible 490 from the seven judges.
In all, the first Air Pitch Startup Competition, which was open to U.S. startups, saw 52 total entries. “I was really pleased with the quality of all of the entries,” said Ferneyhough, of Accenture. “They’ve really exceeded our expectations.”
Watch a recap of the 2018 competition below:
Air Pitch Startup Competition 2018 Finalists
“Suboptimal capacity utilization costs airlines billions of dollars annually,” said CEO Azim Barodawala in his opening remarks, setting up the market need for his company’s offering. “In some cases flights depart with empty seats, leading to spoilage. In other cases flights depart with excess demand, leading to spillage.” In other words, airlines are having trouble matching the right number of people to the number of seats on a given plane.
“Volantio is solving these challenges: We help airlines increase unit revenues, decrease operational costs and improve customer experience,” Barodawala said. In his pitch, Barodawala discussed not just the scale of the opportunity but also the real-world problems that Volantio can help solve, including denied boarding scenarios, changes in aircraft size that impact the number of seats available on a given departure, and even irregular operations, which is industry jargon for when weather or other external factors scramble schedules.
The secret sauce of Volantio, Barodawala said on stage, is that Volantio makes the management of capacity and revenues seamless, and even automatic. “I’ve actually included real examples from two of our current customers today, Volaris, which is using email delivery, and Qantas, which is using SMS. Our platform is scalable to address multiple use cases,” Barodawala said.
The CEO, who was also joined on stage by Volantio chief technology officer Fenn Bailey, went on to describe that real-world example of a customer service rep for Alaska Airlines who uses the service. “Our platform is improving the lives of front-line staff and reducing call center backlog,” Barodawala said. “In the world of David Dao, how many times have you heard about the denied boarding experience getting [positive] feedback like this?” Barodawala asked in closing, to a round of applause from the audience.
Co-founders Romet Kallas and Martin Sahlen introduced their data-driven idea, which hinges on smartphone users volunteering their personal data in exchange for airline discounts and perks, as well as personalized service. Diving into the scale of the opportunity, Kallas mentioned “today there are 2.5 billion people who have at least one of these,” while showing a slide with an image of an iPhone. “There are 50 different pieces of data coming out of that device,” Kallas said, “and each of those represent a piece of the puzzle that can help understand the person behind it.”
“Customer loyalty with millennials and Gen-Z is a massive headache,” Kallas said. “The problem is they expect personalized experiences and relevance,” said Sahlen, picking up the thread. “They’re only loyal to brands that give them a personal benefit.”
That’s where Mekl.io comes into the picture, said Kallas. “This is a demographic that understands the data that their devices are generating and, according to Skift, they’re open to providing that data to brands if there’s a clear benefit in return.”
Mekl.io “enables this exchange,” Sahlen said. By way of example, Kallas talked about the potential for an airline to offer relevant add-on offers, like hotel stays or car rentals, had it known more about a given trip he took with his wife. In another example, Sahlen said that a carrier might offer some frequent flier miles — or even a discounted airfare — to a first-time customer in exchange for “sharing my device, social data, and answering a couple questions from [an airline] about my upcoming travel plans.”
One judge asked whether Mekl was over-weighted toward younger consumers: “It’s very persuasive that you’d acquire young consumers, offering miles, as they’re price sensitive. But as they become older, do you see that those customers would drop off and need to be acquired by the airline [another way]?”
At least at the moment, yes, Kallas said. “We start with millennials and Gen Z as our first focus group. But as we go forward, we might add other features.”
Co-founders Keith Smith and Gerry Goldstein kicked off their pitch with a short explainer video on “Wonder vouchers, the new way to issue and redeem vouchers for an elevated customer experience.” The platform is a mobile-friendly way for airlines to issue refunds and vouchers to passengers that replaces the unwieldy paper forms that airlines have historically used during irregular operations. As the video wrapped, the co-founders talked a bit more about the specifics of how Wonder can smooth airline operations.
“I thought I’d relay a little personal experience to help you understand how Wonder plays with the digital compensation in the industry,” Goldstein said. “I was recently traveling back from Bozeman, where Keith’s office is, back to Orange County, where my office is, and I was traveling through Salt Lake City. My flight was delayed by several hours coming out of Bozeman, so I missed my connection.” The process of getting vouchers ended up taking “close to two months,” Goldstein said. “Had I done that on Wonder, it could’ve been, literally, a five-minute customer service intervention.”
The elegance of Wonder’s solution is that it works with the credit cards and payment platforms that consumers are already using. That means passengers won’t need to sign forms, follow up with various departments, stand in lines, or even download an app. (Since Wonder is entirely web based, it works from any smartphone.) And the Wonder platform has one other big benefit for airlines, Smith said. “You only pay out when a redemption occurs, so if you give a $50 meal voucher, you only pay for what that consumer consumes, say $20.”