A look inside Air Black Box, the airline tech company
Earlier this year, Air Black Box (ABB), the tech company, drew further investment from ANA Holdings (parent of Vanilla Air and ANA) and Cebu Pacific Airlines, joining existing backers that include Scoot (part of Singapore Airlines) and Nok Airlines.
We wanted to find out more about this airline passenger IT and booking system headquartered in the UK, which was founded four years ago and now has 45 employees worldwide.
So we checked in with its boss, Timothy O’Neil-Dunne, who has also been a long-time Node for Tnooz. (This transcript has been edited, partly to make the interviewer look smarter.)
Tnooz: Air Black Box may strike some people as an austere name. What does your company do, exactly?
O’Neil-Dunne: Air Black Box lets any pair of airlines truly cross-merchandise their products while maintaining their brand integrity. We give any airline the tools it needs to cost-effectively connect its products with the products of a partner airline’s brand.
Today it’s very difficult for airlines to bring conventional ecommerce techniques into airline retailing. Air Black Box handles this. We tell the airlines, “Look, It’s a black box. Don’t worry about the complexity. We’ll handle it on the back-end.”
Tnooz: What are you ultimately hoping to do?
O’Neil-Dunne: Our plug-n-play, digital selling platform makes an airline’s sales process for a seat on its own aircraft and on the aircraft of its airline partners a modern, controllable transaction, whether it is via a direct or indirect channel.
We enable an airline of any size to have its product in the marketplace in the form that it sees itself as the owner of its product, pretty much like a conventional retail platform like Amazon or Alibaba.
Tnooz: Airlines already have their hands full handling their overhauls of their tech stacks, res systems, and direct channels, not to mention tech upgrades on the operational side. Don’t they have too much on their plates to handle adding ABB’s tools?
O’Neil-Dunne: Airlines have become increasingly dependent on each other for cross-selling, and their investors appreciate how ancillary sales are their topmost priority. So we are at the sweet spot of airline cross-selling and ancillaries.
Tnooz: You’re not going to convince me that you’re doing something that hundreds of engineers aren’t also working at several other organizations.
O’Neil-Dunne: Yes, people are working on aspects of this at airlines, with their internal tech teams, and at other tech companies. We think our superior tech solves at least part of that problem in a better way, at lower cost. In that set, we’re a supplier base of one.
Tnooz: I’ve bought a British Airways seat via American Airlines’ website without being kicked over to ba.com to complete the transaction, and I even had options to upgrade to first-class, etc.
O’Neil-Dunne: There are some examples out there of airline direct channels enabling customers to buy a flight. But you can’t buy the specific seat.
For instance, to use your example, BA charges a fee for a seat assignment. AA.com doesn’t provide that option for BA flights. BA has several ancillaries it offers customers. You can’t get those on AA.com. Not to pick on those carriers, but you used those as examples.
Maybe BA and AA will someday. But not every airline will want to build this technology in-house….
And it’s not just about the tech. We have to have a lot of domain expertise to interpret what airlines need. We can help with about business and process alignment.
Tnooz: Surely one of the giant travel technology companies that are filled with hundreds of smart engineers can offer a competitive solution and eat ABB’s lunch?
O’Neil-Dunne: The business model of several of the large tech companies requires them to charge airlines more for the service than we have to. We are the low-cost option.
Tnooz: I’m still stuck on the idea that there are other multi-carrier interlining and booking tools out there.
O’Neil-Dunne: The current solutions, where airlines connect with each other, are part of a legacy of traditional interlining. Which is fine if all you want to do is connect a ticket to ride between two carriers who share the IATA commonality.
But that’s not what airlines do anymore. Airlines today want to cross-sell each other’s entire portfolio of products.
The difficulty is that the value of an airline’s brand is not equal to that of its partner, and this also applies to their products.
Tnooz: Can you give an example?
O’Neil-Dunne: If you look at a codeshare between — let’s say, as a hypothetical only — Singapore Airlines and Air New Zealand, because those airlines both have very different product sets yet they code-share.
So if I’m on Singapore Airlines’s website, I would expect my experience as a traveler when I’m buying a seat on a flight operated by Air New Zealand and whose metal has an ANZ flag, would expect the Singapore Airlines experience.
Conversely, if I’m on Air New Zealand’s site, I would expect to have that ANZ user interface and design when I’m buying a seat on a codeshare flight.
Therefore the products need to be aligned, but they need to be aligned at the relevant product of the brand who is selling, for an apples-to-apple-like comparison — not on a lowest-common price facility.
In the simplest terms, we take the products of Airline B and transform them into a new form that can be easily consumed by Airline A’s customers in a way that suits Airline A.
Tnooz: Why is it such a hard tech problem?
O’Neil-Dunne: At their core, the PSSs (the passenger service systems) that the airlines use don’t understand what an ancillary is. So at the level of the native PSS, the systems can’t handle ancillaries at the heart of inventory. That’s what’s broken at the major PSSs from Sabre, Amadeus, and SITA.
O’Neil-Dunne: Navitaire can quite successfully support a host-solved ancillary. But the traditional network carrier PSSs don’t have that capability. So they rely on additional tech to do it, that is quite imperfect and really quite expensive.
Tnooz: ABB claims credit for allowing and being the underlying tech behind the recent launch of the Value Alliance, Asia’s LCC-focused airline grouping in Asia-Pacific. So you only serve LCCs then?
O’Neil-Dunne: No, no, no. LCCs just happen to be our first customers. We will continue to add customers, both traditional network carriers and LCCs.
Tnooz: Will ABB sign its first traditional network carrier as a customer in 2017?
O’Neil-Dunne: It would be extremely unlikely we won’t have a full-service carrier joining us in 2017. We are agnostic to the airline model. We can accommodate them all.
The approach we take is not forcing a homogenous model — something that airlines of all sizes like a lot.
Tnooz: If it’s custom work, it must be hard to scale then.
O’Neill-Dunne: Not really. It’s a piece of technology. The difficulty in scaling is no different than what an airline would face in scaling its own solution built in-house.
But if you are talking about startups and unicorns, we actually see ourselves as a fairly conventional business with a superior product that can disrupt an arcane and inefficient distribution mechanism.
Tnooz: How does ABB fit in to a landscape that already has Farelogix, a 180-person company focusing on helping airlines sell ancillaries?
O’Neil-Dunne: ABB is focused on cross-selling. Farelogix does a great job in its space of servicing just ancillaries.
Tnooz: Who owns ABB?
O’Neil-Dunne: Air Black Box is majority-owned by VaultPAD Ventures, a private airline travel and tourism venture accelerator that has invested in a dozen companies.
Tnooz: Is your intention to sell the company to a larger player?
O’Neil-Dunne: Never say never in this space. But our intention and expectation is to grow into a large company that endures in this space of airline and related travel technology.
And we expect and hope for competitors. Because the current experience for travelers is poor, and the need for change is urgent.
NB: Image courtesy of ABB. Timothy O’Neil-Dunne (left) and Patee Sarasin CEO Nok Air jointly accepting the ABB Award for Airline Innovation of the year from CAPA Chairman Peter Harbison.
Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.