Airlines are focused on sustainability and artificial intelligence when it comes to startup investing, according to a report from the Lufthansa Innovation Hub (LIH), but generally they are conservative when it comes to spending their money in this way.
The report, based on LIH's tracking of airline startup investment deals, found that only 7% of the 340 airlines that are “commercially relevant” and part of the International Air Transport Association (IATA) have ever invested in a startup.
And those carriers, which include United Airlines, JetBlue and KLM, are focused on startups working in sustainability first and then AI.
“Sustainability and AI are no longer ‘nice-to-have’ innovation topics — they are mission-critical priorities that will define competitive advantage in the years ahead,” LIH said in the report. “Airlines that consistently place startup bets in these areas will gain a significant edge as these trends mature and pay off commercially.”
The report found that in 2024 more than half (55%) of the startup investments made by airlines were for innovation related to sustainability in aviation.
“This is not a sudden shift — it’s a sustained trend,” it said. “Back in 2023, 50% of airline-backed startups were also in the climate-tech space, reinforcing sustainability as the dominant investment theme for two consecutive years.”
The trend is promising, according to the report, as the industry looks towards a greener future, though it said that some evidence points to executives across industries changing priorities favoring more immediate concerns.
Following sustainability, airlines are interested in startups developing AI capabilities.
Twenty-two percent of airline startup investments in 2024 were in AI and machine learning, according to the report, marking an 18% increase from 2023.
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LIH called the trend “hardly surprising.”
“The generative AI movement of the past two years has fueled unprecedented interest in AI-driven solutions across industries—including aviation,” it said. “For airlines, AI presents a high-impact, immediate-use case for optimizing operations, reducing costs, and enhancing efficiency at scale.”
While sustainability investments often mean a longer road in terms of payoff, AI investments can be more viable in the short term, the report said, noting that the 10 largest startup investments made by airlines in 2024 either had to do with AI or climate technology, with some overlap of the two.
The report also explores specifically which airlines are making investments, how investing has stabilized in the wake of COVID, what the investments mean for the industry’s future and considerations for airlines who are existing startup investors and some for those who may consider investing in startups in the future.