If they will admit it or not is another thing entirely, but all travel startups at some stage dream of striking a deal with a major airline.
Working with an airline means PR and visibility, pride, "official" validation of a strong idea, and sometimes, but not always, volume.
Many startups hit a very hard wall after trying for months and months to land a meeting, close a deal, or reach a launch date, only to find yet another hurdle.
The word on the startup street is that airlines are old lazy bureaucrats, lacking any one of the following (tick as many as you want)
Understanding where most airlines come from can help decide if you really can, want, or need to work with an airline.
Good reason #1 for being difficult : airlines have to be risk averse
I don’t know about you, but personally, I absolutely *LOVE* risk aversion when it comes to airlines.
People often forget what airlines do as a core business.
Quick reminder: airlines take humans from point A and drop them at point B, hundreds of kilometers away, safe. They do so by flying humans in the sky (not only we do get to point B safe, but also we get served hot coffee and gourmet meals, while watching our favorite movie at 10, 000 meters above earth)
Risk averse cultures exist as a fact of life. In a risk averse culture, anything new is considered a risk, and needs to be carefully evaluated.
A small glitch in a corner of a complex system might have unexpected consequences in another area, so nothing can be taken lightly.
In addition, safety regulations imposed by industry or public authorities require following strict practices for installing equipment, accessing secure infrastructure areas or connecting IT systems.
Believe it or not, an airline is not like your typical home based ecommerce operation, and cannot afford the risk of betting on your big idea out of nowhere.
As a startup, you need to build trust: demonstrate you already work with solid partners, think about risk assessment before hand, prepare contingency plans. Make it easier for airlines to assess and reduce the risks of working with you.
Good reason #2 for being a pain: airlines IT systems are mission critical beasts
Mission critical status applies for obvious safety reasons to all airline backoffice and operating systems, but nowadays also to web front-end systems: these are responsible for driving anywhere from 50% to 99% of bookings.
The words mission critical go together with unavoidable constraints. You and I would do the same if we had large mission critical systems to keep up and running.
Take a good breath and just get ready for:
- "Don’t change something that works" - which explains the 1999 look and feel you can still see in 2014 on some leading airline websites
- Long QA and testing cycles to release anything to production. Which explains why your first MVP cannot be deployed and improved iteratively, but needs to be frozen and delivered weeks before the quarterly release, in order for test plans to be executed end-to-end
- Strict IT security requirements around hosting, system access, rights to know, passwords, policies and so on. Cloud hosting helps outsource some of this more easily, but the paperwork can be enough to keep a biz dev guy busy for months. Get ready for third party audits and penetration tests even if you're just providing colorful icons
- Even if your technology is solid, you still need to survive for all the time it will take to get all the necessary green lights
In most cases, corporate procurement practices also require serious guarantees of business continuity.
- A "minimum of three profitable years in business" is a common requirement.
- A contract signed under the jurisdiction of the airline’s headquarter location is the norm.
- Another typical deal killer is the "dual sourcing" procurement strategy, requiring to identify an alternative solution provider in case you go bankrupt.
The same care that goes into buying and testing a new aircraft is applied to selecting the best provider of your (unique) idea. The procurement folks will ask you to name your competitors, and they will do their shopping and negotiating. It’s the process. It’s their job.
Most airline requirements around IT security and procurement are strict enough that any 3-people startup team, coding on the kitchen table, is by default not eligible to signing anything.
Startups who want to work with airlines must - first of all - ensure their IT infrastructure is rock solid, and possibly require IT security and legal advice.
A faster option is to strike a deal through a trusted intermediary, such as an IT consultancy or a technology provider already working with the airline, who will reassure the carrier about their capacity to integrate your solution under their existing (and already green lighted) agreements and processes.
Bad reasons for being slow: politics and fiefdoms
In most cases, today's organisation and roles at airlines, especially at large ones, are the result of decades of (again, tick as many as you want):
- governmental influence
- joint ventures
- union agreements
- regulatory obligations
So ponder these scenarios:
- You have the airline where the marketing boss is ex-MyAirways and the IT boss is ex-YourAirways, and they won’t talk to each other
- The carrier where the web team reports to commercial operations, while the CRS team belongs to delivery operations, and they won’t talk to each other
- An airline where nothing can be done without green light from legal, and you have to pay their fees
- You must first meet the CxO, yet said CxO is in charge of 10,000 people and impossible to meet
- Rights on CRM data belong to the loyalty subsidiary, and cannot be used for online marketing purposes by the parent company
(Disclaimer: all characters appearing above are fictitious, and any resemblance to real persons is purely coincidental).
As a result, you often end up talking to a great many people, all individually enthusiastic about your idea and clearly understanding the value you can bring to them, but all with hands tied by corporate structure.
This is the situation at many airlines today, and while most people understand it’s not smooth - even internally, organisations and roles cannot be flipped overnight.
Little can be done to overcome these hurdles quickly. Clear accountability also means rigid chains of command. Starting from the top usually helps, but good luck getting there.
The sheer size of some organisations makes it impossible to align all the individual decision makers. You can make it if your solution impacts one isolated department, with full authority on the matter.
A few airlines have assigned a clear mandate for all things "new" to a unique "innovation" entity.
Having an internal sponsor definitely solves half the problem. But these entities don’t always have the power to enforce decisions in other departments, and things can easily get stuck again.
Hang on, and one day things will happen
I’ve been fortunate enough to work with many airlines on a multitude of projects, and I can certainly understand the sense of accomplishment and pride when something new finally hits the road.
I remember a small and cool airline in Northern Europe who launched a joint white label solution in less than a month, from first meeting to production, including the legal paperwork.
So it is possible. It happened because they had a small team, with simple internal communication lines, and we were deploying something already proven and tested with other clients - a no brainer.
I’ve also witnessed projects that never got to an end, despite exciting kickoff meetings, the right people in the room, and genuine interest from everyone.
Given safety and operational constraints, the overall effort to partner with a larger airline can be significantly higher, and take much longer than with small carriers. Projects can also simply stop, after months of work and goodwill from all parties.
It’s possible to work with airlines, but it’s not for everyone. Don't try just for the name on the investor deck.
If you think you have the right solution, jump. But if you jump, remember that airlines’ first mission is to safely fly humans in the sky.
Everything else is secondary, and rightly so.
NB:Jumbo front view and technology frustration images via Shutterstock.