Aeroband wants to bring distributed ledger technology to many aspects of the aviation industry to increase revenue and drive efficiency.
Malta-based Aeroband is seeking to sign a contract with a major airline within a year and hopes for investment in its first app in the coming months.
What is your 30-second pitch to investors?
Aeroband will offer the world’s leading Distributed Ledger Technology (DLT) platform for open-access dApps (decentralized applications), allowing the aviation community stakeholders to collaborate in:
- increasing revenues
- reducing the cost of doing every-day business
- transforming the customer experience
This platform will provide the launchpad for exciting new ideas utilizing blockchain technology which will revolutionize how the aviation industry collaborates, operates and grows, enhancing the way we move people and cargo in the air.
Examples of such apps include cargo tracking, direct reservations through a DLT, tokenised loyalty program, revenue management using AI, re-imagining revenue accounting, and so on.
Describe both the business and technology aspects of your startup.
The business model is simple. We sign up three industry stakeholders in our ID3 model, whereby three industry players provide input to help us design the best app in the market today which can operate at the lowest cost.
Having worked with the largest providers in the industry with the largest market shares the founders know intimately where the gains can be made. The three early adopters will also inherit a revenue share as the app is adopted throughout the industry so early sign up is a wise and potentially very profitable move.
Stakeholders can be airlines, airports, authorities, industry vendors, MROs, suppliers, etc. depending on the nature of the app.
As the apps are deployed on the community DLT, called Aerobloc, there is high resilience and a true sense of ownership without any middleman having centralized control such as in traditional cloud applications.
The DLT will be owned by the stakeholders in the industry, never by any one corporation.
The use of AI in key pivot points will give functional and operational advantage over traditional applications.
Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.
- Using next generation blockchain technology which is massively scalable;
- Both founders are experts in the industry;
- Built a very strong reputation for delivery in the industry at the ‘C’ level;
- Access to global experts with decades of business experience;
- Use of AI to leverage advantage over traditional ‘unintelligent’ apps.
- There are 150 apps in use today which could benefit from a technology upgrade – it was difficult to narrow down to a subset of the eight ‘hottest’ Apps to focus on;
- Always seeking the best talent who understand the new economy of distributed Apps – these folks can be scarce!;
- First aviation community dedicated DLT and first mover opportunity to demonstrate thought leadership and demonstrate value of blockchain;
- Industry currently running on old tech which is at end of life;
- Funding is strong due to the popularity of digital transformation in aviation;
- Spend on blockchain in aviation expected to increase to $7bn+ by 2023.
What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?
By reconnecting the airline with their customer, the airline can offer a much more tailored and sophisticated product;
The cargo supply chain can leverage the immutable ledger to record a true history of all touch points and IoT history which can be trusted by all parties;
Tokenised loyalty points can become more liquid in the open market and hold broader purchasing power;
Revenue management will become more attuned to market variables in real-time and produce higher yields;
Peer to peer settlement of ticket revenue through smart contracts can take place between individual airlines and within airline groups.
Savings include reduction in operational capital offshore as escrow for settlements abroad is no longer required, reduction in disputes and associated costs, real-time value exchange rather than delayed settlement and very low transaction costs compared with todays systems.
So you've got the product, now how will you get lots of customers?
The ID3 model ensures that as each app is launched there will be two or three launch customers. Demonstration of the success of the product in an industrial setting is the best way to attract further customers and grow market share.
Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.
Spend on blockchain is expected to increase from $400 million to an estimated $7 billion in 2023. The addressable market is vast and includes any one of the 150 apps currently in use in the industry across the 600 largest airlines.
Our SOM is estimated to be about $15 million year one due to the initial scaling and establishing the apps in industrial deployment. Year two and year three will see an increase to $30 million and $50 million respectively.
The sizing has been an exercise the founders conducted with airlines based on their current budget sizing and their roadmaps.
During this exercise a consistent picture emerged of increasing budgets for digital transformation including the application of AI and Blockchain, and the business outcomes can be summarized as increased revenues, decreased costs and customer experience transformation.
How and when will you make money?
We project the profitability point at 14 months from first app investment. First app investment is expected to close in the next couple of months, so this would before mid-2021.
What are the backgrounds and previous achievements of the founding team?
Brendan McKittrick was a co-founder of Planitas Airline Systems in 2000 and most recently was global CTO/CIO of Accelya, handling the execution of a large component of the IATA BSP/SIS processing settlement systems to the value of around $200 billion in ticket value.
Accelya is a market leader in airline systems with IP for over 20 products deployed in 350 airlines and 100 sea shipping companies.
David Galea Sammut has worked for over a decade in cost management side of the business, engaging both airports and large airlines such as Etihad airways.
Brendan brings the technical strengths to the team and David the business development.
What's been the most difficult part of founding the business so far?
Continuously keeping a focus on a key subset of apps in aviation has been the greatest challenge as there are just so many opportunities out there.
Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?
Aeroband doesn’t see luck as the key requirement, but consider careful planning and intimate knowledge of the industry as the key differentiators.
As part of his previous role Brendan participated in the due diligence in a number of aviation tech company acquisitions. The experience gleaned from that enabled him to understand where weaknesses and strengths lie in tech startups, particularly in aviation.
Brendan also successfully created and sold two startups in the late 90s and early 2000s. These experiences greatly help Aeroband in avoiding the pitfalls and to focus on where they can bring immediate value to industry stakeholders.
Both founders spent much of their previous careers helping airlines and airports overcome key challenges, most of which persist in the industry today.
Aeroband is keenly focused on those challenges and through their contacts in the industry there is already a positive expectation around the apps it is building.
A year from now, what state do you think your startup will be in?
With a high degree of confidence, Aeroband predicts that a year from now the Aerobloc DLT will be in production, Aerolabs will have released a software development kit for 3rd parties, the first app will have been built and the first contract with a major airline will have been signed.
What is your end-game? (Going public, acquisition, growing and staying private, etc.)
Our end game is simple: Aerobloc will thrive as a community based DLT under the enduring governance of industry peers, and permanently free from centralized control as a true blockchain should be.
Aerolabs, our development organisation, will be a hotbed of new apps and innovation delivering unparalleled value to the users and to our shareholders through strong recurring revenue streams based on transaction rates and widespread technology adoption.
The founders see their involvement remaining in the long term, but also recognize that in due course Aerolabs may become an attractive acquisition target for industry players interested in playing a major role in the digital transformation of the airline industry.
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