Volantio Inc., the Atlanta-based startup that helped United Airlines Inc. manage its overbookings in the wake of the Dr. Dao scandal last summer, is telling investors it’s cracked a seemingly impossible code: generate more money for airlines while improving customer satisfaction.
Eight months into its product lifespan, the company—which helps airlines preventatively rejigger inventory by offering buyouts to flexible passengers—closed a $2.6 million series B funding round in February. The monetary sum is less impressive than the venture capitalists contributing to it: On board are three of the world’s biggest aviation investors, which rarely join hands: International Airlines Group (IAG), JetBlue Technology Ventures (JTV), and Qantas Ventures.
One reason they all bit: to avoid the type of public relations nightmare that smacked United last year, when the carrier forcibly removed a doctor from an oversold aircraft, leaving him with a concussion and a broken nose. Volantio’s technology could have preemptively sorted passengers onto different flights so the airline wouldn’t been positioned to oversell in the first place. As of now, airlines are handling re-bookings manually.
But Volantio’s applications are far more varied—and consumer-friendly—than just that. Airlines are interested in the platform because it offers a variety of solutions for everyday pain points. “With Volantio, we see real opportunities to support our customers while helping JetBlue manage irregular operations better,” says Bonny Simi, president of JetBlue’s venture capital arm. JetBlue itself has a strict policy against overbooking, ruling out Volantio’s main use case—but the carrier can leverage the technology to mitigate such other crises as sudden aircraft swaps or cancellations due to weather. It’s helpful in most situations that ask passengers to make changes or compromises.
The Overbooking Crisis
In December 2017, the most recent month for which statistics are available, 5,324 domestic flights were canceled in the United States. In the final quarter of the year, the country’s 12 biggest airlines reported that nearly 75,000 passengers were denied boarding onto the planes they’d hoped would take them from Point A to Point B. And that was a good track record. Over the past two years, the typical quarter has seen upward of 100,000 travelers turned away from their flights, according to figures by the Department of Transportation.
Overbookings may be on a downward trajectory, but that’s a lot of angry customers.
With Volantio’s support, airlines can flip that narrative without compromising on their bottom lines. They can resell any released seats at a sky-high price, which maximizes revenue while rebalancing passenger loads and eliminating drama at the gate. Operations are streamlined, with fewer gate agents doubling as a front line of customer support. And passengers get rewarded for flexibility well before they leave for the airport, if—and only if—they’re up for it. It’s what Volantio’s chief executive officer, Azim Barodawala, calls a “triple win.”
A Solution for Many Problems
Overbookings aren’t the only type of disruption that can shatter your best-laid travel plans. Airlines are frequently forced to swap larger jets for smaller ones; weather delays and cancellations regularly wreak havoc on schedules; and mechanical issues often leave passengers stranded at the gate.
JTV’s Simi suggests one common scenario in particular: hundreds of passengers displaced after a major storm. Flights are booked solid for days. How do you get more of them to their destinations faster, without empty seats to fill? Every regularly scheduled passenger that accepts a voucher or mileage bonus to delay travel could open a seat for someone who’s already been delayed. (Simi says JetBlue has no immediate plan to roll out Volantio’s technology but is considering this use case for future deployment.)
Barodawala would agree that Volantio’s potential is just as big for consumers as it is for airlines. As a frequent flyer himself—he clocked 291,000 miles in 2017—he knows that the pain points associated with air travel begin with the shopping experience. Volantio helps, he says, because “flexible passengers receive a benefit for changing their travel plans, and last-minute travelers are able to access flights that otherwise would have been full.” Plus, the whole process happens quickly, a few days ahead of departure, and entirely via mobile notifications; no call centers or waits in line are required.