Major airlines have launched discounted economy fares in recent months to compete with an onslaught of cut-rate carriers offering cheap tickets. But their biggest shakeup may soon come from new technology.
That point was underscored on Thursday by Silicon Valley investor Peter Thiel, who led an $8 million Series A round in a startup called Flyr, according to an announcement Wednesday. The company crunches big data to predict swings in airfare prices, and to create a suite of airfare booking services for both the airline industry and consumers. Its products for consumers include fare price protection, fare comparisons, and alerts when prices are about to change. For airlines, it offers price and demand forecasting, as well as a pricing elasticity engine, which helps airlines calculate customer sensitivity to price changes.
Thiel, who is reportedly considering a run for California governor, has at times criticized airlines for their inefficiencies in building capital. In a 2014 op-ed in the Wall Street Journal, he said that for every $178 fare, they only collected 37 cents per passenger. He compared that to Google, which keeps 21% of revenue as profits.
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Over the past year, U.S. Airlines have been involved in what’s been termed a race to the bottom, with so-called Economy Minus fares meant to attract bargain hunting travelers. Those discounted tickets often strip out frills such as free carry-ons, snacks, and extra legroom.
Flyr currently offers its fare protection services through TripAdvisor and Priceline, and plans to use Thiel’s investment to continue innovating and rolling out its products, it said in a press release. Based in San Francisco, the company was founded in 2013 by Cyril Guiraud, Alexander Mans, and Jean Tripier.
Flyr received $7 million in seed funding, including from JetBlue Technology Ventures, in March 2016, according to Crunchbase.
A representative from Flyr did not immediately respond to Coins2Day’s request for comment.
