Where You’ll See It
So far, Volantio has launched with Qantas, Iberia, Volaris, and Alaska Airlines. More are coming soon: “We’re hoping to have nine to 12 airlines using our platform by the end of the year, and we have a pretty strong pathway to reach that goal,” says Barodawala, referencing strong interest among major U.S. and international carriers.
Volantio’s investors will also help deploy the technology far and wide. JTV, for instance, is now developing technology not just for JetBlue, but for partner airlines around the world. “Every major airline in the world is looking at us for access to innovative technology,” she says. A core group of five to six airlines will soon be named as JTV’s initial partners, and Simi believes that “Volantio will benefit from all of those airlines almost immediately.”
Also notable: IAG is actively identifying opportunities for Volantio across its portfolio of airlines, which, in addition to Iberia, include British Airways, Aer Lingus, and Vueling.
Early Feedback
A spokesperson for United, the first carrier to adopt the technology as part of a pilot program last summer, tells Bloomberg that its test phase has concluded and feedback is under review. The airline says it’s simultaneously “reviewing results from that test, along with other opportunities.”
Iberia, meanwhile, has decided to double down on Volantio’s platform. After a trial run, parent company IAG participated in Volantio’s Series B fundraising round, saying that “the majority [of our customers] considered it positively as it gives them an even broader set of choices and opportunities” and that the company is “in the process of testing for more opportunities across the Group.”
An $8 Billion Opportunity
Based on the fact that most airlines operate at roughly 85 percent capacity, Barodawala estimates that the top 150 airlines globally stand to create up to $8 billion in additional revenue by using Volantio to shift inventory and fill more seats. His calculation is based on the cumulative revenue these 150 airlines produce on an annual basis (about $550 billion) and the 15 percent they’re leaving on the table. It accounts for both cost savings and new revenue generation.
Getting airlines to 100 percent capacity is a tall order. But to get as close as possible, Barodawala needs to maximize his appeal to consumers. With his new funding, he plans to invest in machine learning and artificial intelligence capabilities. “Every passenger is different, and every passenger values different things,” he says. “You’re typically given one offer at the gate if your flight is oversold—usually a voucher for a couple hundred dollars. But that voucher might be worth nothing to you,” he explains.
Volantio’s solution: Gather non-identifiable data about purchasing behaviors to learn what type of consumer is more likely to accept what type of offer. “Maybe people who fly from one type of city to another value cabin upgrades more than they value a voucher,” he posits. People who plan quick return trips might be motivated by additional frequent flier miles. “We want to tailor so that each customer doesn’t get the same offer; they get the right offer.”
If Volantio can pull off this type of automation, JTV’s Simi says it would mark stupendous change. “I’m not surprised he’s getting such excellent early traction,” she says of Barodawala. “He’s really onto something big.”
This article was provided by Bloomberg News.