STARTUP STAGE: xCheck gives airlines tech to better showcase web fares

xCheck

U.S.-based xCheck is a tool for airlines to manage and optimize their fares when pushing prices to online marketing channels.

Founded by a former executive at British Airways and a product management head from eBay, xCheck is already profitable within two years of launching.

Describe both the business and technology aspects of your startup.

Airlines face critical issues merchandising the primary driver of consumer demand: the price of fares.

Department of Transportation regulation in the U.S., and the sheer logistics of dynamic inventory - fares varying constantly across millions of potential flight combinations - make answering the apparently simple question “What’s our best price to..?” extraordinarily hard to answer. 

xCheck connects to airline inventory systems, finds the optimal price for any route and publishes that into any digital channel.

Our platform continually monitors inventory and automatically updates any ad or webpage if a better price is found or inventory runs out. 

This eliminates risk, thousands of hours of manual effort and, most crucially, stimulates new, more profitable direct demand.

Moving demand to direct channels is a $47 billion opportunity for the airline industry and is enabled by xCheck.

What inspired you to create this company?

xCheck was born directly out of the frustrations faced by one of our founders, John McDonald. As vice president of marketing at British Airways, John faced what he described as “an endless nightmare” when trying to advertise fares online.

It took many people from multiple teams working together for several weeks, then manually monitoring and updating content as required. 

After leaving BA and facing this exact same issue at another airline, John texted a "there has to be a better way" message to our other founder, Tim Underwood.

The two set about fixing the issue and when the time was right, xCheck was launched.

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

Our primary strengths are agility and expertise. xCheck is entirely focused on helping airlines drive direct revenue through intelligent merchandising of their fares.

Everybody on the team is immersed in the use case and the company was born from within the industry. As a team, we carry very little operational overhead - the vast majority of our team are engineers.

This allows us to respond to individual client needs very quickly and ensures that our clients are always talking to someone who is an expert in their domain. 

xCheck is a young company and to date we’ve never marketed our service publically.

Our primary opportunities exist in expansion of product use in North America - on top of the airlines already leveraging it, markets outside of the US and other industries which also use dynamic pricing (ticketing and ground transportation, for example). 

It’s been said that the three primary threats to any startup are co-founder conflict, product/market fit and running out of money.

We’re happy to say that the first of those was never an issue and the latter two were resolved in our first year.

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

Most of us can sympathize with frustrations felt by doing multiple searches to find the best price for a flight, or seeing an advertised price and not being able to find it easily, or wanting to get away and caring more about budget than destination.

xCheck enables airlines to communicate with their customers on a topic they care about in an honest, accurate and reliable manner.

We believe that a great customer experience begins at point of purchase and so accurate communication of fares from that first moment is essential to customer satisfaction.

So you've got the product, now how will you get lots of customers?

We’re fortunate to have a decent network in the industry already and because of the airline consolidation, our existing clients are happy to recommend us to their partners. 

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

IATA has published very useful statistics on the ambitions of airlines to support the shift to direct revenue.

By 2021, airlines seek to move $47bn of revenue to direct channels. Being able to merchandize their fares will be crucial if they are to divert attention from OTAs, etc.

There’s no way to achieve that other than an automated, intelligent tool. 

As part of our culture, we work very closely with our clients and give them a voice in prioritizing our roadmap. We give users early access to new features and incorporate their feedback before new versions are shipped.

That’s something which larger companies cannot do and is a form of partnership appreciated on both sides.

How and when will you make money?

xCheck is currently generating profitable revenue. 

What are the backgrounds and previous achievements of the founding team, and why do you have what it takes to succeed with this business?

Our founders have known each other for over ten years. Our airline insight comes from John McDonald, who has been working in the industry since 2008.

Tim Underwood was previously head of product management at a division of eBay Enterprise where he was building and maintaining various marketing technologies. John taught Tim everything he knows about PRASM, ASK and Load Factors. 

What's been the most difficult part of founding the business so far?

Airlines are slow moving organizations which do a lot of diligence on new solutions before installing them and we should all be very grateful for this!

It’s one of the reasons why air travel is so safe.

Though that means that we bring on new clients slowly, the benefit is that each client gets a lot of attention and we learn from each new engagement.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

We prefer to reduce our need for luck as much as possible. xCheck was started to solve a problem our founders had direct knowledge of and our primary motivation was to do just that.

Because we are so interested in the industry and faced the problem ourselves, it’s easy for us to be passionate on the subject. We hope that our clients sense that commitment and expertise.

What question might we have missed......?

How does this help airlines evolve from their current state? 

xCheck enables airlines to move to an "inventory first" model for marketing. We often think of xCheck as "last mile delivery for revenue management", a department which traditionally has been too disconnected from marketing.

For airlines to move the needle on demand, those departments must be better connected - xCheck provides a platform to do just that. 

Inventory-first marketing is a methodology which concerns itself with Fair Market Share, Maximizing Yield and Channel Distribution.

These terms are familiar to RM but Marketing often lack the ability to deploy their resources in alignment to those goals.

xCheck brings those teams closer together and gives marketing a real tool to proactively deliver the work done in RM directly to the consumer and, through automation, reduce the operational overhead to zero.