Flyr Labs, which sells software to airlines to help them set their fares in revenue-boosting ways, has bought two smaller companies to expand its offering. On Wednesday, the startup announced that it acquired Faredirect. This company analyzes flight data and helps airlines to price ancillary items such as checked baggage and seat upgrades. xCheck is a software provider for airline marketing.
Although the companies did not disclose details of the transactions, they said that the agreements involved equity and cash. Flyr is a San Francisco-based startup backed by JetBlue Airways’ corporate venture arm JetBlue Technology Ventures. To date, it has raised more than $30,000,000 in funding from multiple investors.
Alex Mans, founder and CEO of the company said that “we set the pricing” for many airlines clients. These deals will allow us to expand our services and cover both ancillary revenues as well as airfare marketing technology. These deals are part of our expansion. Our goal is to assist in the decision-making process of other areas within an airline company.”
Airlines’ revenue-generating potential has been severely affected by the pandemic. This makes it difficult for executives to invest in technology. Flyr, despite this headwind, still managed to achieve sales success.
Matt Brown, Flyr’s vice-president of growth, stated that “by the end of the year, airlines using our system will have the equivalent to $14 billion per year in passenger revenue.” Brown called this a “revenue-under management” number, which refers to the amount of airline sales that the startups “effectively control the price.”
Flyr shifted from being a provider of business software to a consumer offer three years ago. Flyr stated that it will continue to invest in cloud-based revenue management applications, even though the price of airfares is more volatile due to the pandemic. According to the company, some airlines saw revenue growth of 8-10 percent this year after adopting their systems.
Big gains without big tech
Flyr stated that it is currently working with three low-cost carriers and three hybrid carriers. It also has two large network carriers. Flyr has added new carriers since then, although it refused to reveal the names and descriptions of those companies. However, it did confirm that at least one airline had completely switched from an existing revenue management vendor.
Mans stated that the expansion phase is with several carriers. Airlines often split the network up into different groups of analysts. Start with 10% to 20% of the network, and then spread like oil until you reach 100 percent.
This startup also uses aggressive selling techniques to boost its growth.
Mans stated that the company will not charge for the service until they have proved the increase in revenue or the performance gains. We will subsidize the IT staff and analysts needed for rollout. It’s a simple financial decision to try the system.
Flyr was having a difficult time selling products before the pandemic. Flyr received some theoretical objections from airline executives to its sales efforts. Flyr’s deep-learning methodology was not well understood and it was too complex for pricing analysts.
Mans stated that Covid was as devastating to the airline industry as it has removed many mental barriers for executives about experimenting with external tech companies. The sales cycle is now faster.”
Flyr’s progress is evident in its employee headcount. Flyr started the year with 65 employees, now has 130 and plans to have well more than 220 by February.
Mans stated that some of this growth could be attributed to additional acquisitions.
Flyr can compete with public tools such as Amadeus and PROS (Pricing & Revenue Optimization Solutions), Sabre’s Revenue Optimizer, and Sabre.
Flyr may benefit from the latest deals to help it grow. Flyr acquired xCheck (pronounced “cross-check”), which allows it to push pricing recommendations through the airline’s Google Ads or Facebook ads.
“This acquisition places xCheck’s application right at the heart of revenue management,” stated Tim Underwood (founder and CEO of xCheck). We’ll soon have an integrated system that allows airlines to automate thousands upon thousands of marketing decisions per day within a matter of months.
Flyr will now be looking into adding services to other commercial airline units, which are not related to revenue management. Flyr sees the potential in automating common tasks for flight crew management, cargo planning and financial forecasting.
The startup also stated that it is investing in data-related services.
One airline provides access to its entire inventory, prices, search data and bookings. This company has standardized the data so that it is easily accessible to startups. The airline now wants to know if the company could get the data in the clean-up format. This product could be offered to other airlines interested in similar data transformations.
“We definitely have a major interest in distribution as well, including NDC,” Mans said, referring to the new distribution capability (NDC) that’s been a popular topic for airlines for years.
Photo credit: JetBlue Mint Class Transatlantic Service. JetBlue is an investor and customer in Flyr, an aviation tech startup. JetBlue
Publiated at Wednesday, 01 September 2021, 14:00:01 +0000