EyeforTravel is now Reuters Events - LEARN MORE
May 2019, London
Europe's biggest event for commercial and digital travel execs
Is the evolution of regional travel the next big thing?
Could the next year be the year of the electric flying taxi? JetBlue Technology Ventures seems to think so. Sally White reports with additional insight from EyeforTravel
The quest for innovation is an expensive overhead, but at JetBlue they’ve found a way for it to wash its face. The US low-cost airlines set up JetBlue Technology Ventures (JTV) three years ago, seeing thousands of start-ups with new ideas every year. Silicon Valley-based president, Bonny Simi, says: “JTV not only invests in startups, but also introduces them to JetBlue as a potential customer; our goal is to find a wide range of innovations that could enhance all aspects of JetBlue’s business and operations.”
The team at JTV – Simi, who is a JetBlue executive and pilot and MD Raj Singh, a former tech investor and entrepreneur – have now invested in 24 start-ups. These won the sanction of the investment committee, which is made up of three JetBlue executives, including Simi’s boss, Chief Digital & Technology Officer Eash Sundaram, and one outsider, Jim Adler of Toyota AI Ventures. Their picks are building everything from more localised weather prediction technology to artificially intelligent assistants that can help small business people manage their travel plans.
“That said,” says Simi, “there’s a natural ceiling on JetBlue’s ability to operationally absorb proof-of-concepts and partner with emerging technologies each year. To address this challenge, and to continually add value to our portfolio, JTV is building a global network of like-minded travel providers that are embracing innovation within their companies and prepared to operationally engage with startups.” Current partners include Air New Zealand and Vantage Airport Group, and each have seconded a person to the JTV offices to “immerse in local deal flow and partner with our current and potential portfolio of startups.”
JTV has also just bought into Miles, which is similar to a frequent flyer programme, but for all forms of transport. On the $2.25 million investment, Simi says: “With Miles, no matter how you travel – by foot, bike, car, plane, or boat – you can earn rewards in a simple and unobtrusive way. The wide variety of rewards, coupled with the novel approach to earning them, puts Miles in a position to revamp customer loyalty and develop more meaningful engagement between companies and consumers. Miles can be redeemed from retailers such as Amazon, Starbucks, Target, Whole Foods, Bath & Body Works, Canon, Cole Haan, HelloFresh, NatureBox, and many more.
There’s big potential to disrupt short-haul travel with electric vertical take off and landing (eVTOL) vehicles and personal autonomous aerial vehicles
Prior to that they invested in Silicon Valley-based Shape Security, which provides best-in-class defence against malicious automated cyber-attacks on web and mobile applications. Shape says it has deflected over $1billion in fraud losses for major retailers, financial institutions, airlines, and government agencies. Unsurprisingly it has also won backing from Google Ventures, among many others.
Among the companies which won JTV backing for last year were the weather specialists ClimaCell, which finds and forecasts location-specific, low-altitude, short-term weather, electronic ticketing platform Redeam, which connects connecting tourist attractions to resellers and Lumo, who predict flight delays months, weeks, hours ahead of time.
Interestingly, Simi believes some of the most impactful industry changes will be in the evolution of regional travel. She says: “Currently, a lot of major airports are at capacity with limited growth opportunities for gates and slots for smaller carriers. There’s big potential to disrupt short-haul travel with electric vertical take off and landing (eVTOL) vehicles and personal autonomous aerial vehicles. These new types of aircraft can take advantage of smaller airports and open up regional aviation networks.”
See EyeforTravel Feb 20, 2018: Urban taxi to get lift off on blockchain
Not in a vacuum
An initiative at JetBlue Ventures has been setting up a network of other non-competitive travel companies, so that when JetBlue Ventures puts money into a start-up, it can make connections to a cruise line, for instance, or a hotel chain. The group understands that no start-up is going to succeed with just JetBlue as a customer. The objective is build connections with start-ups and other travel partners, who are invited to invest if they wish to but this is not a prerequisite.
The picks were the fruits of a lot of research, though as Simi says, it helps to be based in Silicon Valley. “By embedding ourselves in Silicon Valley – a concentrated hub of innovation – we can focus on finding big ideas and emerging technologies in their early stages.”
It was also important for the JTV team to have physical operations separate from JetBlue Airways’ headquarters in New York. The mix of independence, coupled with high-level oversight, allows for a nimble operating unit that can move quickly at the pace of Silicon Valley, while also ensuring alignment with the current and future needs of our parent company.
JTV stress that it is also essential “to be very clear about your goals: are you focused on financial returns or strategic returns?”
Other airline moves
Like JetBlue, other airlines can see the strategic advantages offered by getting to know what the new up-and-coming travel tech companies are doing.
Singapore Airlines announced in January that it had opened its new digital innovation lab, known as KrisLab, as part of “a significant investment programme aimed at making it the world’s leading digital airline”, according to a press release. KrisLab will work with start-ups, established incubators and accelerators, “enabling the SIA Group to fully embrace digitalisation and technology in all aspects of its business operations”. One of its innovations is KrisPay, making it the first to launch a blockchain-based airline loyalty digital wallet capability.
Last year Singapore Airlines invested in Australia’s Data Republic, which offers a platform for inter-organisational data sharing. Singapore Airlines senior VP of Information Technology George Wang said the airline was focused on how data can help them understand customer preferences.
One of Singapore Airlines’ innovations is KrisPay, making it the first to launch a blockchain-based airline loyalty digital wallet capability.
Malaysian budget carrier AirAsia Group launched its venture capital fund in the US two years ago. Named RedBeat Capital, the fund is focusing on post-seed-stage start-ups in travel and lifestyle, financial technology, artificial intelligence and cybersecurity. Reuters commented at the time that AirAsia has been trying to re-invent itself as a travel and technology firm to exploit data and offset cyclical volatility in airline earnings.
EasyJet took the step three years ago of backing Brent Hoberman and Henry Lane Fox (of LastMinute.com fame) who have the goal of creating 200 successful travel start-ups over five years. “Connecting the talented easyJet team with the next generation of disruptive entrepreneurs will only continue to drive fresh thinking and uncover new opportunities", easyJet’s then chief executive Dame Carolyn McCall said at the launch press conference.
However, for other airlines looking at setting up a venture route to the latest ideas, Singh warns that it “requires a large amount of corporate commitment for it to work!”
The payoff is “multiple years down the road”, he told tech newsletter Innovation Leader: “You need people to understand that there are going to be failures. You need to have an open culture in the [venture] group, and the wider company.”
Watch out for our upcoming white paper on the changing face of loyalty or join us in Chicago for EyeforTravel North America (Oct 28-29)