11 startups ‘taking off’ to deal with customer airline issues
United Airlines suffered a massive publicity nightmare this week as a viral video emerged of a doctor being dragged off an overbooked flight. Just days before, Delta Airlines was forced to cancel nearly 3500 flights over several days, stranding passengers and crew. While in the United States, passengers are mostly left on their own to negotiate compensation (which sometimes comes in the form of $11,000!) in the event of an overbooking or cancellation in the EU, passengers have structured entitlements to cash-in on when flights don’t go right.
At the center of this benefit is EU Regulation 261, which explicitly lays out when passengers are entitled to claims, up to 600 EUR in some cases! While the law itself pretty clearly lays out when passengers are entitled to claims (you can click through here for an easy-to-use government site), actually contacting the airlines and filing the right paperwork has the potential to be a significant barrier to entry for some users.
This directive has opened up a blue ocean for a number of startups hoping to capitalize on the new space. In the market map below we categorized some of more popular providers currently competing for travelers, and then took a closer look at the venture backed companies:
AirHelp — Funding and functionality wise, AirHelp appears to be the leader in this space, having raised over $12M from investors. At the core of the product is an automated inbox-scanning application that works quite well. I connected my Gmail account, and scanned the hundreds of flight email receipts I’ve taken for any that would qualify for compensation based on delays and cancellations. While the status UI was a little shaky when I tried, it, the startup say that they’ve helped “550,000 passengers in 35 countries” and I love the final travel stats that they display. Additionally, since they are already scanning my inbox, there could be potential future product extensions to everything from price changes on purchases to subscription analyses.
ClaimCompass — Coming out of 500 Startups Batch 19, ClaimCompass offers several products: a consumer facing Compensation Calculator, an API developed in collaboration with Microsoft to monitor flights, and a white label widget for sites to embed. Though their consumer facing product is behind the leader, targeting businesses could help them carve out a niche.
ClaimAir — ClaimAir differentiates themselves by providing resources to file baggage compensation claims (although I couldn’t quite determine how to do this on the web app), and also partnerships with major corporations like MasterCard on an affiliate / white label basis. The actual web app is a fairly basic single-entry system similar to ClaimCompass.
FlightRight — Advertising “over 2.000.000 happy customers” and “enforced over € 100,000,000”, FlightRight has a consumer oriented claim checker, as well as partnerships with OTAs to handle claims and delays on passenger’s behalf.
While some of companies are primarily EU-focused and based, it would be remiss not to talk about three other innovators in the space:
FairFly is an Israeli based startup that has raised $2M+ to take on price changes on refundable fares for corporate travelers. If a ticket is fully refundable, the site can track any price fluctuations with the fare up until the flight data, and automatically switch out a new ticket at the lower fare. FairFly used to have a consumer oriented product, but have since switched to target business customers.
Freebird is service that provides free rebooking options for your flight if it is delayed or cancelled. It’s quicker than waiting for the airline, and more comprehensive than standard travel insurance. After booking your flight, you purchase Freebird on top of your ticket- with the price determined by the site’s algorithms. They’ve raised $3.5M and I’ve had friends successfully rebook a flight with them!
Service, which has raised over $3M, is a customer service company that contacts any number of businesses on behalf of their users and tries to resolve their issue, including airlines. For US based airlines, the Service compensation flow gives you options to request Miles or Voucher for your issues:
I’d expect to see more entrants into the air travel compensation space as new EU court rulings come out, as airlines continue to overbook flights and displace travelers, and as AI and machine learning make it easier to automate the claim processes.
What other companies are innovating in the airline compensation / customer service space?