The Startup Turbocharging the Airline Upsell Game at Online Travel Agencies
Skift Take
Startups come and startups go. But it's worth looking at Gordian Software regardless. Big-name airlines have taken a sudden interest in the tech vendor, and their interest highlights a broader opportunity for them in upselling ticketed flyers.
Lufthansa Group's airlines have begun to use technology from startup Gordian Software to help power the upselling of add-ons through Priceline, Hopper, and other online travel agencies, Skift has learned. To Lufthansa's eyes, the startup is just another tech vendor among dozens. But for the Seattle-based startup, the deal is a significant win.
Gordian — which focuses on helping airlines peddle add-ons such as seating assignments and checked baggage — has recently signed a flurry of deals. It now supports more than 90 airlines, including Air France, American Airlines, British Airways, China Eastern, China Southern, Delta, Emirates, Etihad, Finnair, Ryanair, Singapore Airlines, Qantas, and United. The company helps these airlines upsell passengers typically after, but sometimes during, booking tickets on Trip.com, Kiwi.com, and about 200 other travel agencies and resellers.
"We now have an annualized revenue run rate of $70 million, which is 14 times what it was at the start of the year," said Gordian co-founder and CEO Stephen Grabowski.
Companies helping airlines sell with greater digital savvy have become quite common. What makes Gordian Software unusual is it found a surprisingly underserved niche in upskilling brands such as TravelPerk and LastMinute.com at upselling ticket buyers after they've booked tickets.
Many airlines will need to flog evermore varieties of extras to regain profitability post-pandemic. That may explain many airlines' sudden interest in Gordian. Yet the story of how this small company founded in 2017 has grabbed the attention of so many large players in such a short time is notable for what it says more broadly about industry dynamics.
While many other tech vendors have focused on helping airlines with the shopping and booking parts airline sales, Gordian has concentrated on the post-booking part, where they fine-tune the upsell.
Since 2014, many large airlines are losing money on the base ticket on many itineraries that they only make up from a margin perspective by selling ancillaries.
So you might have thought they had learned by now to play the upse
