Flyr, the San Francsico-based airfare forecasting startup, is expanding to Europe in early 2015, thanks to a $500,000 equity investment from Axa Seed Factory, the venture arm of Axa, the world's largest insurance company.
Their joint venture will be called Flyr International and will be based in Paris.
Flyr, which has 15 employees, forecasts changes in the price and availability of tickets for individual flights.
It enables large players, such as travel intermediaries, insurance companies, and credit card companies, to create and sell fare-protection products with its technology.
Flyr's flight-level data is more specific than what was offered by earlier prediction services, such as by Farecast, a startup that Microsoft acquired and later closed, and by Kayak.
One of many moves
In December, Flyr's free consumer site for US airfare predictions went public in a beta format. The site claims to predict fare changes for 1,407 routes, or the majority of US flights, during the upcoming 120 days.
This week, Flyr rolls out FareBeacon, a service that alerts consumers by email when the price for an airline ticket they are tracking may soon change.
In the next few weeks, Flyr will release a consumer version of a price-protection product for US domestic flights on major airlines.
The product, FareKeep, will be similar to the price-protection plans that were pioneered by Air France and Continental Airlines (and that are still sold by Continental's merger partner, United). But Flyr's products will offer farelock options for a variety of airlines, not just ones on a particular carrier.
Insurers can use Flyr's API to create their own airfare farelocks, either white-labeled or co-branded, via an API.
A number of travel management companies (TMCs) are testing the solutions, with a plan toward reselling via a white-label or co-branded model, says Tripier.
By the end of February, Flyr expects to launch its first co-branded fare-protection product with a US commercial partner.
Testing with TMCs
Despite its consumer moves, Flyr's model for making money is primarily business-to-business. Says Tripier:
At heart, we thought of ourselves as a data company that prices the risk associated with buying airfare. That puts us very close to insurance and financial derivatives. Axa's interest validates that assumption.
Accurate predictions of sellout risk for flights is one of the solutions that has been tantalizing for TMCs, especially when presented via a hosted solution that returns requests at high speed, at scale.
In a typical arrangement, a user of a customer's system submits a flight number and a departure date, and Flyr returns with predictions for each day for 120 days.
The company also returns statistical accuracy measures for its predictions, similar to the "margin of error" data often seen in political polling. Users may can choose to elect to ignore particular predictions if they don't come with a high enough confidence level.
We calculate live confidence levels and we do constant back-testing of all of our data against what really happens.
Partners can know down to a flight-level prediction basis how accurate we've been in last seven days for our forecasts, and how accurate we expect to be.
It's a live and constant audit of accuracy of the data.
Regarding the company's expansion, Flyr's CEO Jean Tripier concedes that doing fare predictions in Europe will take more complex calculations than in the US. The structure of airfares on the Continent is more complicated, he says.
But the company is sure it will crack the code and start launching products in Europe later this year.
There's business to be had. Last year, $14 billion in travel insurance was sold globally.
Flyr International has already hired a general manager, Alexandre Migan. One can predict with a high level of confidence that additional hires are on the way.
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